- The World Bank this week approved US$ 250.08 million to support efforts by the Tanzanian government to reduce poverty in the country. The funds are to support three main operations; a Poverty Reduction Support Credit, a controversial water supply and sanitation project for Dar es Salaam, and an agricultural development project.
- The Government is committed to the goal of reducing poverty, says Basil Pesambili Mramba, Tanzania's Minister of Finance, welcoming the funds. "However, the total resources available to the government are insufficient to implement poverty-reducing policies."
- Time is needed firstly to expand the revenue base from a higher growth rate of the economy and secondly to observe tangible results from those policy actions implemented to raise revenue, Mr Mramba added. In light of these factors, the government viewed the funds "as a crucial part of [the World Bank's] support in the effort to reduce poverty."
Judy M. O'Connor, World Bank Country Director for Tanzania commented that the programmes approved represented "concrete evidence of the World Bank and other development partners, under government leadership, working together in mutual trust towards the common goal of poverty reduction."
The Poverty Reduction Support Credit - supported by a US$ 100 million credit and a US$ 32 million grant - was to be integrated into the government's budget "to implement key strategies aimed at reducing poverty throughout the country by improving the management of government services and developing the private sector, laying the foundation for attacking income poverty more effectively," the World Bank statement reads.
This credit was to support "macroeconomic stability, growth that targets the poor and the creation of jobs." It was also harmonised with budget support provided by 11 donor countries and would "help to support budgetary needs in the priority sectors which have a strong identifiable link to poverty reduction" said Benno Ndulu, World Bank Team Leader for the operation.
It is expected that the poverty reduction credit would accelerate growth by promoting private investment, reducing the cost of doing business, and enhancing the efficiency of the economy. This again, would reduce poverty, the Bank holds.
The disputed Dar es Salaam Water Supply and Sanitation Project is supported by a US$61.5 million credit, which is to "help improve water supply and sanitation in Dar es Salaam and part of the Coast region." Critical voices however say the credit is part of the effort to sell off the city's water supplier, DAWASA.
- The project is a first step in the long term effort the government has embarked on to improve water supply and sanitation services in the Dar es Salaam area, however said Alain Locussol, World Bank Team Leader for this operation. "It is also a very important one, as the government has addressed key issues, such as management arrangement, cost recovery and commercial policies, before implementation starts." Mr Locussol's comments reinforce concerns that water rates are bound to increase even more, making supply more difficult for the city's poor.
The sanitation project's objectives were to be achieved "through a partnership that combines private management of the technical and commercial operations by an international professional operator, and public financing of the rehabilitation and extension of the systems," the World Bank says, underlining that DAWASA's privatisation remains a key issue. The project further was to help identify a new source of water for the capital city and prepare sustainable longer term water supply and sanitation projects.
Finally, the so-called "Participatory Agricultural Development and Empowerment Project (PADEP)" was supported by a US$ 56.58 million credit. It is to fund "efforts to raise agricultural productivity in rural areas by empowering communities to make important decisions, sharing the costs of production, increasing their purchasing power, promoting improved farming practices, and assisting in the maintenance of infrastructure to improve access to the market place."
By empowering the rural community, the project "hopes to raise production of food, incomes, and assets of participating households and groups in about 840 villages." This project was expected to "expand the impact of growth to the rural poor by enhancing the profitability of agriculture and export products through improved quality and productivity, the reduction of marketing costs, and by eliminating barriers that inhibit products from reaching markets."
Tanzania has remained one of the poorest countries in the world and is heavily dependent on agriculture, which accounts for 50 percent of it's Gross Domestic Product (GDP). The country has however continued to improve its growth and poverty focus over the past several years as evidenced by its GDP growth that reached an estimated 5.9 percent in real terms in 2002.
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