Economists urge structural reforms to reduce poverty, bolster private sector growth

Dar es Salaam. Economists are advising the government to prioritise the optimisation of resources, foster an investment-friendly atmosphere, and reform policies and laws to combat poverty and bolster private sector expansion.

Speaking to The Citizen yesterday, the experts stressed the importance of undertaking structural reforms aimed at alleviating poverty and catalysing growth within the private sector.

Prof Semboja Haji Hatib, a seasoned economist who teaches at the University of Dar es Salaam and the State University of Zanzibar (Suza), emphasised the necessity for comprehensive transformational systems.

"All policies should prioritise the optimal utilisation of resources, which inherently diminishes poverty," he said.

He further emphasised the need for transparency in government institutions, asserting that appointments should be based on merit rather than personal connections to ensure efficient resource management.

“Capable individuals should compete for top positions in public institutions so that they perform like the private sector," he said, adding that those appointed due to personal connections, should not be expected to reduce and eliminate poverty.

Echoing similar sentiments, economics lecturer at Dar Es Salaam University College of Education (DUCE), Prof Abel Kinyondo, highlighted the disparity in benefits between sectors like telecommunications, mining, and infrastructure development, which predominantly benefit a select few, and sectors with larger employment potential being left underdeveloped.

"To combat this imbalance, we must bridge sectors with significant employment potential with those experiencing substantial growth to lift more individuals out of poverty," said Prof Kinyondo.

Recognising the demographic dividend, he underscored the benefits of Tanzania's youthful population, stressing the significance of providing them with essential skills for both self-employment and the job market to drive economic progress.

However, he said the population growth in Tanzania is more of an advantage than a disadvantage because Tanzania has a young population, which means it can equip them with skills and benefit the country in terms of human capital.

"If we equip these young people with skills for self-employment, it's a solid reason for our country to make significant economic progress. But if our young people remain without skills, it could be even a bigger disaster," he said.

He emphasised that what needs to be done is to link sectors with many people and those with good growth so that more people can benefit from them and move out of poverty.

"Even the review of laws and policies should consider this because the growth of various sectors in the country should improve the living standards of individuals," he explained.

Economics lecturer at Sokoine University of Agriculture (SUA), Dr Chris Magomba, underscored the importance of implementing strategic structural reforms, particularly in sectors such as education, infrastructure, telecommunications, and energy, to reduce business costs, enhance connectivity, and attract private sector investments.

"We need a combination of structural reforms that can create an enabling environment for economic growth and development," he said.

“We should also focus on promoting innovation and facilitating technology transfer, which can drive growth in sectors such as the digital economy and advanced manufacturing," he added.

The executive director of the research think tank Repoa, Dr Donald Mmari, said to achieve these goals, investment environments need to change in the country by amending policies and laws to be more investor-friendly, both domestically and internationally.

"Investing in reforms that facilitate innovation and technology transfer is paramount for driving growth in emerging sectors like the digital economy and advanced manufacturing," Dr Mmari said.