The World Bank Board of Executive Directors approved on Thursday an International Development Association (IDA) credit and grant of a total value of 150 million US dollar in support of efforts by Tanzania to implement its second poverty reduction strategy in 2004.
The value of the IDA credit is 60 million and the IDA grant value is 90 million dollar.
The Second Poverty Reduction Support Credit (PRSC-2) will finance the implementation of the governments comprehensive macroeconomic and social policy reforms as spelt out in Tanzanias Poverty Reduction Strategy.
It focuses on four key development areas: sustaining and accelerating growth and broadening its impact; supporting results orientation of public service delivery; enhancing public sector performance; and strengthening environmental management.
The budget support provided through the credit and grant will help the government close the fiscal gap between the cost of implementing key elements of Tanzanias poverty reduction strategy and resources available from the governments own domestic revenue and other donor support.
The PRSC-2 is also a testament to Tanzanias success in donor harmonization around Governments poverty reduction strategy. The Bank together with a group of twelve other donors provide coordinated budget support to Tanzania, using a common performance assessment framework grounded in the countries poverty reduction strategy and a joint, semi-annual review process.
The World Bank Task Team Leader for the project Robert Johann Utz acknowledged that “the targets set in Tanzanias PRSC-2 to support reforms aimed at accelerating economic growth and broadening its impact, improve public service delivery, enhance transparency and accountability of public spending, and promote environmental sustainability. PRSC-2 will assist Tanzania to achieve the Millennium Development Goals”.
With per capita income of about 280 US dollar per year, Tanzanias 33 million inhabitants are among the poorest in the world. The countrys economy is heavily dependent on agriculture, which accounts for about 50 percent of GDP, provides 85 percent of exports, and is by far the largest employer.
Although the country experienced worsening poverty in the early 1990s, the benefits of more recent growth have contributed to reverse the trend. During the past decade, food poverty has declined from 21,6 percent to 18,7 percent, while basic needs poverty has fallen to 35,7 percent from 38,6 percent a decade earlier.
The credit is on standard International Development Association (IDA) terms, with a commitment fee of 0,35 percent and a service charge of 0,75 percent. The credits period of maturity is 40 years, including a 10-year period of grace.
For more information on the World Banks work in sub-Saharan Africa visit www.worldbank.org/afr
For more information on the World Banks work in Tanzania visit www.worldbank.org/afr/tz
Kilde: www.worldbank.org
