The government of Japan has waived 1,2 billion yen (115 million US dollar – ca. 700 mio. dkr.) worth of debt that Tanzania had incurred with the Japan Bank for International Cooperation for up to 20 years.
The head of economic cooperation at the Japanese embassy in Dar es Salaam, Tatsuo Hirayama, told IRIN that whereas Japan used to provide debt relief grants, Tokyo decided at the end of 2002 to cancel debts for all the Highly Indebted Poor Countries.
The cancellation of Tanzanias debts only referred to Overseas Development Assistance loans, accumulated over the last 20 years, but Hirayama said that discussions were “on going” on the cancellation of Tanzanias commercial loans.
Analysts welcome the move, saying that the money that would have been used to pay the debts could now be used for the countrys second Poverty Reduction Strategy (PRS), aimed at improving access to services for the poor.
Flora Musonda, an economist at the Economic and Social Research Foundation, an independent, not-for-profit institution that carries out research and policy analysis in Tanzania, said if used correctly, the money would be of great benefit to the poor.
– The PRS is just a few years old, so it is difficult to know how effective it has been. A review is being carried out but we can say there has been some good areas while other areas not so good, she told IRIN.
She added: – The next phase is important as it targets rural areas. But the issue is that, in some places, the basic infrastructure is so poor, or is just not there, that the priority is to install it in the first place. So poverty will remain for some time before people begin to feel the difference.
A Poverty Reduction Strategy (PRS) examines a countrys macroeconomic, structural and social policies to promote growth and reduce poverty. Tanzania prepared its PRS to qualify for Highly Indebted Poor Country status, which it achieved in late 2001.
The PRS was prepared by the government, through a participatory process involving civil society and development partners, and Tanzanias first phase focused on securing budgetary support for education, health and infrastructure development.
The second PRS phase targets the poor and aims to increase accessibility to services in the rural areas, where 85 percent of Tanzanias population lives.
Kilde: FN-bureauet IRINnews
