In Tanzania people are considered poor when their consumption is less than the national poverty line, whereby consumption includes all goods bought and those produced and consumed at home, such as food, household equipment, clothes, personal effects, personal care, recreation, cleaning, domestic services, contributions, fuel, petrol, soap and cigarettes. Not all consumption items are included in poverty calculations. Expenses on health, education and water are excluded for instance.

The national poverty line was estimated by the NBS in 2001 based on the 2000/01Household Budget Survey. It represents the cost of goods (food and other goods) typically consumed by poor households. In 2001 the national poverty line was Tshs7, 253 per person per 28 days. As prices increased by 93% between 2000/1 and 2007, the 2007 poverty line is Tshs. 13,998 (7,253 x 1.93) or approximately Tshs 500 per person per day.

Tanzania has received wide recognition for steering its economy in the right direction. In its recent publication, “Tanzania: the story of an African transition” the IMF argues that in the last two decades the Tanzanian economy went through a period of successful transition in which economic liberalization and institutional reform led to a recovery of GDP growth to more than 7% per year since 2000.