By using growth incidence curves and pseudo-cohort analysis, we show that Tanzania’s growth
from 2001 to 2007 has not been favourable to the poor. The underlying reason for this disparity
appears to be the slow growth in agriculture, on which most rural poor make a living. However,
we argue that development of agriculture alone would not enable sustainable poverty alleviation
in Tanzania. Instead, the country needs to emphasize both productivity improvements in
smallscale agriculture and growth in non-farm employment. Increased farm production will only
enable higher farm incomes if greater supply of agricultural products is matched with greater
demand for those products. Growth in non-farm sectors and greater urban job creation are
crucial to creating such demand.