Poverty in Kagera, Tanzania: characteristics, causes and constraints

Although Tanzania has made some progress it remains one of the poorest countries in Sub Saharan Africa. The predominantly rural, agricultural-dependant Kagera region in Northwest Tanzania is marked by the stark inequalities that characterise the rest of the country. A new working paper brought out by the Poverty Research Unit at the University of Sussex takes a closer look at poverty in Kagera examining in particular the determinants of household welfare.

The paper adopts an income approach to poverty and uses information on household consumption to measure living standards. It looks at household survey data from the Kagera Health and Development Survey (KHDS) 1991/94 and 2004 to explore poverty trends during this time. It finds that mean reported spending in Kagera barely increased over the decade even though national GDP is estimated to have doubled. This may be evidence that urban incomes have grown faster than rural incomes. At the same time, the proportion of individuals living below the poverty line fell by 7 percent and poverty severity decreased by 13 percent which suggests that fewer resources will be required to further reduce poverty.

The paper then investigates the 2004 data in terms of household welfare determinants. It finds that human, social and physical capital all play a significant role in improving households’ living standards but the relative importance of these factors varies among the poor and non-poor. Findings include:

• households with less diversification outside of agriculture are more likely to be poor
• having educated parents is estimated to have a negative impact on the probability of being poor
• an increase in the size of a household raises the likelihood of being poor
• receiving assistance from external sources reduces the probability of a household being poor by approximately 2 percent for every 1 percent increase in the value of help received
• rural communities are worse off than urban ones with an 18 percent greater chance of being poor
  

Finally, the paper examines gender relations within households and issues surrounding risks and shocks. It finds that female-headed households are more likely to be poor and have lower consumption levels than male-headed households. Their disadvantage is greater among higher consumption quintiles, possibly reflecting increased gender inequality in non-agricultural employment. The paper also finds that poorer households with a higher engagement in agriculture and fewer options to diversify outside agriculture are more vulnerable to external shocks. Since Tanzania is a food importing country, and poor households rely on food purchases too, both are likely to experience the hazards of global food price fluctuations.