How Tanzania doubled its wealth in only 15 years

The state of the Tanzanian economy, east Africa’s second largest, is a study in contradiction.

Wealth per capita—that is, the value of assets owned on average by an individual in Tanzania—is $480. Just to get some perspective, the global average is $27,600. For a comparison from closer to home, consider that in Mauritius, wealth per capita stands at $21,470, according to data from New World Wealth, a research firm.

At the same time, there’s been a lot of wealth created over the past decade. The $480 figure is a 92% increase from 2000, when wealth per capita was at $250. Over the same period, the number of Tanzanians with assets worth $1 million or more has more than doubled, from 1,000 people to 2,200 as of 2014.

 

Meanwhile, the number of people able to meet basic consumption needs has risen by just over 6% since 2007, while the number of people living in extreme poverty, struggling to meet basic food needs, fell by 2%, World Bank figures show.

Some of the progress is no doubt tied into the 6.3% economic growth that the country has averaged over the past several years—a pace it’s expected to maintain for several years to come. As the World Bank notes in a new report assessing poverty in Tanzania, “A 10 percent increase in GDP growth per capita can be expected to produce a 10.2 percent decrease in the proportion of the poor.”

 

For the most part, however, the economic benefits have been concentrated in urban areas. Rural Tanzanians are still struggling.

 

And social mobility is still a challenge. From 2007 to 2012, less than a third of the country’s 5o million people were able to lift themselves to a higher welfare class. Meanwhile, 13% of the population slipped into the lowest quartile for consumption, and 12% of the poor found themselves stuck in chronic poverty.

Still, the World Bank finds that the poor have benefited disproportionately for the past few years, despite the fact that agriculture, the primary source of income for most of the country’s poor, grew only 4.2% annually from 2008 to 2013. That lagged the country’s overall economic growth, which was driven “mainly by fast-growing and relatively capital-intensive sectors” like finance, transport, and communications, the World Bank notes. However, the poor accumulated other kinds of improvements to their standard of living, thanks to factors like education, increased land ownership, and better infrastructure such as roads and local markets.

This article is published in collaboration with Quartz. Publication does not imply endorsement of views by the World Economic Forum.

To keep up with the Agenda subscribe to our weekly newsletter.

Author: Omar Mohammed is a reporter for Quartz covering East Africa based in Tanzania’s commercial capital, Dar es Salaam. 

Image: A general picture shows the skyline of Tanzania’s port city of Dar es Salaam. REUTERS/Andrew Emmanuel