World Bank Approves 160 Million dollar for Sixth Poverty Reduction Support Credit to Tanzania
WASHINGTON, 21 October 2008: The World Bank Board of Executive Directors Tuesday approved an International Development Association (IDA) credit* of 160 million US dollar (ca. 865 mio. DKR) in support of the implementation of Tanzanias National Strategy for Growth and Reduction of Poverty (MKUKUTA).
The sixth Poverty Reduction Support Credit (PRSC-6) focuses on sustaining high and shared economic growth and expanding the effective delivery of basic services through financing the government budget.
It is the third in a series of five annual PRSCs and is provided in the context of a harmonized framework for general budget support supported by a group of 14 donors and will help the Government pursue its policy objectives laid out in the three clusters of the MKUKUTA – growth and reduction of income poverty; improved quality of life and social well being and good governance and accountability.
Given the advanced stage of reforms in Tanzania, PRSC-6 supports the significant progress that has been achieved by government in improving the institutional and financial set-up in the energy and transport sectors and in the area of governance, through the enactment of a new anti-corruption and a new audit bill.
The credit, together with other partners budget support contributions, also sustains the government in funding its basic services and infrastructure development needs, while strengthening the countrys own financial management and budgetary delivery systems.
– This Poverty Reduction Support Credit (PRSC) builds on IDAs financial support to recent reforms undertaken by Tanzania focusing on sustaining macroeconomic stability, increasing domestic resource mobilization, promoting pro-poor economic growth and increased investment in core social services such as education, health and water. The World Bank is confident that this credit will further improve service delivery in the public sector, said John Murray McIntire, World Bank Country Director for Tanzania, Uganda and Burundi.
The mid-series PRSC offers the opportunity to build on previous achievements under PRSC – 4 and 5, and address emerging challenges and risks.
In particular, starting this operation, the PRSC series will gradually strive for selection of new policy areas to increase the program relevance to shared growth, and in particular attempting to increase the focus on income generation in rural areas, and in areas receiving large rural migration flows.
It will strive, too, to move towards more focus on policy implementation rather than supporting the set up of new policy and institutional frameworks in addition to improving government M&E systems to achieve a better follow-up on the program results, and to allow a tighter link between the program design and the impact on the ground.
– This implies a renewed focus in supporting rural development, improved environment for private sector including in remote and rural areas and for Small and Medium Enterprises (SMEs). It also implies a stronger focus on better budgeting through improvements of the integrity and strategic alignment of budget funds, and better integration of public expenditures with more effective M&E systems, said Paolo B. Zacchia, the World Bank Task Team Leader for the project.
Tanzania has implemented a comprehensive program of reform, including macro-economic stabilization, privatization, reduction of barriers to trade, strengthening of the tax system, decentralization, strengthening of public expenditure and financial management, and public service reforms.
These reforms – supported by significant amounts of development assistance – have improved Tanzanias growth and poverty focus as evidenced by its GDP growth that reached an estimated 7,3 percent in 2007.
*The credit is provided on standard International Development Association (IDA) terms, with a commitment fee of 0,5 percent, a service charge of 0,75 percent over a 40 year period of maturity which includes a 10-year grace period.
For more information on the World Banks work in Tanzania visit:
www.worldbank.org/tanzania
Kilde: Verdensbanken
