In this paper, we argued that for the past thirty years, poverty scrutiny has been
vital in understanding the ongoing levels of development scantiness in developing
countries. Various ant-poverty policies, goals, programs and strategies such
as Structural Adjustment Program (SAPs) and Millennium Development Goals
(MDGs) have been designed and implemented but little progress has been made
in terms of poverty reduction. Failure of these interventions, particularly in Tanzania
is likely due to unrealistic framework designs to deal with specific type of
poverty; such that, it is based on standard poverty measure. The rural households
in particular, where poverty is more concentrated earn their livelihood through
physical productive assets. In order to sustainably address the economics of rural
poor, we would much understand the economics of physical productive assets.
Thus, asset-based approach (asset-based index) from Principal Component
Analysis was employed to examine rural asset dynamics and found that majority
of rural households lack basic combination of productive assets which are sustainably
accumulated over time. We found rural poor, with poor asset accumulation
over time and this could be attributed among others by lack of basic asset
combination in the production process and consumption smoothing as well. For
sustainable rural poverty reduction, it is important to assess the household‟s asset
stocks and understand how these assets interact with the circumstances to attract
the choice of livelihood strategies which can determine a household‟s well-being.