DAR ES SALAAM, 9th January 2010: Tanzanias national strategy for growth and reduction of poverty, commonly known by its Kiswahili acronym MKUKUTA is to receive a supplemental credit of 171 million US dollar (ca. 870 mio. DKR) from the World Bank.
The World Bank said the credit will help in implementing MKUKUTA and mitigate the impact of the international financial and economic crisis while staying on course towards the objectives of the seventh poverty reduction support credit (PRSC-7), which was approved in June 2009.
The PRSC-7 was the fourth in a series of five annual PRSCs provided as general budget support. The support focuses on sustaining high and shared economic growth and expanding the effective delivery of basic public services through the government budget.
The global financial crisis has left its mark on Tanzania. Growth has declined, in particular in sectors such as textiles, tourism, and cash crops that support exports and the rural population.
The government has responded to the crisis by providing a moderate fiscal stimulus seeking to sustain growth by maintaining essential expenditures, increasing the focus on the agricultural sector and on infrastructure investments, and providing targeted relief for directly affected activities.
– Overall, government’s response to the international crisis appears adequate and congruent (afstemt) with Tanzania’s current fiscal space and development strategy, Mr. Javier Suarez, the World Bank task team leader for the operation said.
The supplemental financing will help close the financing gap in the FY09-10 budget, which resulted from the need to maintain expenditure levels in accordance with the government’s poverty reduction objectives, as well as unforeseen expenditures required to address the impact of the international economic slowdown, and lower than anticipated domestic revenues and foreign financing.
The World Bank through the International Development Agency (IDA) last year approved an Accelerated Food Security Program that will provide 220 million dollar to support three complementary operations.
The first operation, a new emergency recovery loan for an Accelerated Food Security Project for 160 million dollar, seeks to contribute to higher food production and productivity in targeted areas by improving farmers’ access to critical agricultural inputs.
The second operation is an additional financing credit for the Tanzania Second Social Action Fund amounting to 30 million dollar that seeks to improve access by the poor and vulnerable to enhanced socioeconomic services and income-generating opportunities.
The third operation, an additional financing credit for the agriculture sector development program of 30 million dollar, seeks to promote sustainable agricultural productivity through scaling up of small-scale irrigation facilities and integrated soil management practices.
Kilder: Verdensbanken og East African Business Week
