Tanzania is a resource-rich nation, but throughout the country’s history its natural resource wealth has not translated into economic well-being for more than a small minority. MKUKUTA, the National Strategy for Growth and Poverty Reduction, as the nation’s overarching economic policy and poverty reduction strategy for the past five years, recognizes the centrality of natural resource management and good governance for attaining more effective development policies.
MKUKUTA highlights the significance of natural resource management for poverty reduction and economic growth efforts in Tanzania.
MKUKUTA emphasizes improving the linkages between macro-economic drivers of growth such as tourism and mining, and rural livelihoods at the micro-level. MKUKUTA also emphasizes the importance of sound, accountable, and transparent governance of public resources as the foundation of a healthy and growing economy that spreads benefits throughout the population. MKUKUTA has a number of important targets and strategies related to improving local community benefits and income from natural resources as a way of implementing its general principles.
Natural resource governance and poverty reduction in Tanzania
A range of recent findings highlight the importance of natural resources to Tanzania’s economy and to local livelihoods. In a country where over 70% of people still live in rural areas and 80% of people depend on agriculture and natural resources for their daily needs, patterns of natural resource use are critical to the economy at all scales. At the same time, nearly 44% of the country’s land area is governed by some form of conservation regulation, which has a bearing on the way people utilize and manage the resources on the land.
A recent World Bank study (2008), drawing on a range of more specific sectoral studies, highlights the importance of forestry, wildlife, fisheries, and mining to the economy, and the role of governance factors in structuring resource benefit flows. Specifically, the study makes the following key points:
Tourism is a key macro-economic sector, accounting for more than US$1 billion in annual revenues and roughly 200,000 jobs; tourism is underpinned by wildlife and marine resources;
The per capita value of informal forest uses amounts to between US$25 and US$50 in rural areas, providing in particular over 90% of energy supplies, 75% of building supplies, and 100% of traditional medicines;
Lake fisheries generated revenues of over US$100 million in 2003;
Informal local resource uses are not properly captured in economic statistics, but if they
were, they would amount to US$100 per capita per annum in Gross National Income (GNI is currently US$350 per capita).
At present, most natural resources – particularly wildlife populations, forest cover, and lake and coastal fisheries – are in a state of decline, representing a loss of the natural capital necessary for
Tanzania’s long-term economic prosperity. The reasons for this depletion include consumptive and demographic pressures, but are fundamentally driven by institutional arrangements that do not create sufficient local incentives for sustainable use. Instead these arrangements encourage short-term, open access consumption while discouraging investments in conservation.
Weaknesses in local rights and tenure over lands and resources, which reduce local incentives to conserve natural resources, are a major governance issue. This is recognized in government policies seeking to address these issues. However, while resolving issues of governance has long been recognized as a key to national and local level economic development, implementation of measures that address these governance issues remains a challenge. As a result, governance issues remain at the centre of the ability of the next poverty reduction strategy to achieve better impacts in the realm of poverty reduction and economic growth
What are the benefits ?
Start up programs provide the entrepreneurs with tools and training that helps to build successful, sustainable businesses and connects them to local market opportunities, business services, and microfinance opportunities.
What is the Debt - to - Equity Ratio
Debt to Equity ratio is a financial ratio indicating the relative proportion of shareholders’ equity and debt used to finance a company’s assets. Closely related to leveraging, the ratio is also known as Risk, Gearing or Leverage.