Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2001:14: Can HIPC Reduce Poverty in Tanzania?

Anders Danielson ()
Additional contact information
Anders Danielson: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden

Abstract: While growth has increased in Tanzania during the past five or six years, it is still too low to have a visible impact on poverty. Indeed, recent evidence suggests that the amount of both income and non-income poverty are roughly the same as they were a decade ago. Since debt relief provided under HIPC will free government resources, the initiative will potentially help reduce poverty through larger government expenditures on social sectors. However, it is unlikely that Tanzania will be able to reach the situation projected in the Decision Point document; projections are extremely optimistic, and deviations from these are likely to lead to a rapid accumulation of debt, so debt sustainability – as reflected in the debt-to-export ratio – will not be met.

Keywords: Tanzania; HIPC; debt; growth

JEL-codes: F34; F35; O19; O55

26 pages, August 22, 2001

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