Resilience and Sustainable Poverty Escapes in Tanzania
Transitory poverty escapes and impoverishment are a problem in Tanzania despite a notable fall in poverty since 2000. Indeed, the proportion of households experiencing sustained escapes only just exceeds the proportion experiencing transitory escapes, churning around the poverty line or becoming impoverished over that period. Preventing impoverishment and supporting sustained escapes is particularly important to study in Tanzania, where the poverty reduction rate does not match the growth rate.
The USAID Center for Resilience commissioned the Overseas Development Institute, in conjunction with the Chronic Poverty Advisory Network (CPAN), to conduct research into resilience and poverty escapes in Tanzania and select Feed the Future focus countries. Specifically, this research examined why some households escape and remain out of poverty (sustainable poverty escape), while other households escape it only to fall back into poverty (transitory poverty escape) and still others descend into poverty for the first time (impoverishment).
The fourth in the series of resulting research reports, Resilience and Sustainable Poverty Escapes in Tanzania, combines analysis from the National Panel Survey with qualitative research approaches to further investigate the drivers of sustained and transitory poverty escapes and of impoverishment. The report investigates the resources (land, livestock and value of assets), attributes (household composition and education level) and activities (including jobs and engagement in non-farm activities) of households that enable them to build their resilience to sustainably escape poverty.
Key findings from the report include:
Initial household resource base
• Asset accumulation significantly increases the likelihood that poverty escapes will be sustained. Qualitative fieldwork reveals how sustained escapers increased investments across the board, including in farming, off-farm businesses, housing and transport vehicles for rent, and had high levels of savings.
• Quantitative results show that owning more livestock significantly increases the likelihood of a transitory poverty escape. This could potentially reflect the fragility of investing solely in livestock -- a resource vulnerable to disease, death and theft as well as grabbing during periods of conflict.
• Qualitative data reveals the significance of loss of land and other assets due to divorce and inheritance disputes, payment of medical bills, theft, and sale or confiscation of assets to meet debts in driving transitory escapes. Female-headed households were particularly vulnerable to property grabbing by husband’s family or theft.
• Household size and dependency ratios matter for the likelihood of sustained poverty escapes. The fieldwork reveals a clear distinction between sustained escapers and the chronically poor, with the latter having more children and dependents.
• The fieldwork finds that education has been a key factor in sustaining poverty escapes for the current generation of household heads, with secondary education in particular playing an important role in ensuring a household’s ability to escape poverty sustainably.
• Agriculture figures prominently in most life histories. Households often diversified by expanding agricultural activities over time and/or made investments in technologies and new crop varieties to add value to farming.
• In the fieldwork, sustained escapers made investments to diversify into a variety of non-farm businesses. This contrasted to the non-farm activities with low start-up costs of the chronic poor, such as engagement in petty trade.
• Life histories revealed that accessing loans from good finance institutions – and then moving up the finance chain to Savings and Credit Cooperative Society (SACCOs) and bank savings and loans - was a key in building the diversified livelihoods required to sustain an escape from poverty.
• Diversification into nonfarm activities among sustained escapers was supported by entrepreneurship, good business partnerships, and stable, mutually supportive spousal relationships.
Household shocks and stressors
• Sustained escapers in the life history interviews remained resilient in the face of economic instabilities. A key reason for this was their high level of livelihood diversification across agricultural and non-farm activities and their ability to maneuver into new activities and out of unproductive ones.
• For transitory escapers and the chronically poor, by contrast, life histories reveal how the death of a breadwinner, poor health, illness, and associated financial shocks all had a downward push in wellbeing.
• The descent into poverty among those with transitory poverty escapes often occurred amidst concurrent or double shocks.
Household strategies for sustaining poverty escapes
• Stories of sustained escapers point to diversification in livelihoods and assets across and within sectors as the bedrock for poverty escapes. They concurrently invest in expansion or value addition to both agriculture and non-farm activities. Diversifying completely out of farming is rare unless the household moves to a city.
• In addition to investing in existing activities, sustained escapers describe how they maneuver into new economic activities as prospects rise (e.g. house and business residence rentals; transport vehicles for crop marketing and transporting people).
• Life histories reveal how investments are supported by beneficial financial inclusion. The pace of borrowing and investing increases enormously as households move up well-being levels.
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