The World Bank in Tanzania

Strong macro fundamentals allowed Tanzania to emerge from the COVID-19 pandemic in good shape, though economic recovery has been relatively modest due to strong headwinds created by the ongoing war in Ukraine, tightening global financial conditions, and global economic slow-down. For 2022, the World Bank estimates that GDP growth was 4.6%, marginally higher than 4.3% growth in 2021. The economic recovery in 2022 nevertheless remains broad based with most sectors rebounding to pre-COVID activity levels. Headline inflation continued to edge up during 2022 as a result of rising international commodity prices and severe drought, reaching 4.2% in the first nine months of 2022 compared to 3.5% in the same period the previous year. This is concerning as food makes up about 30% of the consumer price basket.

The pandemic caused an increase in the poverty rate, from 26.2% in 2019 to 27% in 2021. A minor reduction in the overall poverty rate is anticipated in 2022. The recent Tanzania Economic Update published by the World Bank noted that reversing this pandemic effect could prove challenging amidst considerable development and reform challenges that have been exacerbated by the pandemic shock and spillovers from the war in Ukraine.

In 2022, a relatively stable exchange rate, coupled with fuel subsidies, helped contain consumer price inflation to just 4.8%, well below the regional average of 10%. Global food prices rose sharply , and a severe drought damaged domestic food production, pushing cumulative food-price inflation to 6.6% during the first nine months of 2022. Transportation accounted for 14% of the consumer price basket, and mounting fuel costs increased transportation prices by 7.9% (year-on-year). Elevated food and fuel prices undermined consumption among lower-income households.

The initial results of the 2022 Population and Housing Census indicate that Tanzania’s population stood at 61.7 million in August 2022. According to the census results, the population increased by 37% between 2012 and 2022, reflecting an average annual growth rate of 3.2%, the third highest population growth rate in the world. The census indicates population in Zanzibar grew from 1.30 million in 2012 to 1.88 million in 2022, a 45% increase reflecting an average annual growth rate of 3.78%.

Last Updated: Mar 24, 2023

As of March 2023, the World Bank-financed portfolio in Tanzania is comprised of 23 national projects with a commitment of over $7.05 billion and 5 regional projects with a commitment of approximately $750 million, a total portfolio of about $7.8 billion. Key sectors in the national portfolio are transport (20.8%); education (20.2%); energy (15.7%); water (11.2%) and urban resilience (10.0%). Other projects cover social protection, governance, digital development, human development, and poverty. Tanzania regional projects are focused on energy, education and poverty and equity.

A new Country Partnership Framework is to be developed this year in partnership with the Government of Tanzania and is currently anticipated for completion around March 2024. The completed 2018-2022 CPF was aligned with the priorities identified in Tanzania’s Second Five-Year Development Plan and Zanzibar’s Third Strategy for Growth and Reduction of Poverty, supporting three focus areas: (1) enhance productivity and accelerate equitable and sustainable growth, (2) boost human capital and social inclusion, and (3) modernize and improve the efficiency of public institutions.

The work program has focused on deepening investments in transport, information and communication technology, and energy to support spatial transformation and inclusive growth, with the purpose of significantly scaling up human capital development. These interventions were aimed to address the rural-urban divide and boost the enablers for poverty reduction that affect access to infrastructure, social services, and productive jobs. Given the key role of the private sector, the framework aimed to maximize access to finance and generate jobs for Tanzania’s development.

International Finance Corporation (IFC)

The IFC strategy in Tanzania is guided by the 2018-2022 CPF and is line with the Government of Tanzania’s Vision 2025, and the Tanzania Reposition Strategy approved in February 2022. Vision 2025 seeks to achieve middle-income status and a high level of human development, transforming a low-productivity agricultural economy to a semi-industrialized one led by modernized and highly productive agricultural activities which are effectively integrated and buttressed by supportive industrial and service activities in the rural and urban areas. IFC’s strategy will focus on developing the agricultural sector (with a focus on improving aggregation, warehousing, and logistics infrastructure to boost agriculture). In addition, the strategy will support the deepening of financial services, infrastructure development in power and telecommunications, and—on a merit basis—investment in sustainable mining. IFC investments will be gender-inclusive and climate sustainable. 

Since 2005, IFC has committed $795.3 million in long-term financing accounts. IFC’s current committed portfolio in the country is well-diversified, covering all major sectors with a total of $372 million. IFC management has approved a $6 million gender program as a follow-on to the successfully completed Finance2equal gender program and the CIDA-funded BEES program. The IFC advisory portfolio is now over $10 million. IFC has also recently partnered with the Gates Foundation-funded Livestock Sector Development Program in Tanzania.

Analytics and Knowledge Products

High-quality, consolidated knowledge products facilitated and deepened policy dialogue, and informed design and realization of government programs. These products were used to inform plans for tourism-led growth and initiatives related to energy, governance, education, and natural resources.

The Tanzania Economic Update series has focused on a range of topics including the importance of investing in girls and human capital development, financial inclusion, water resources, agricultural transformation, tourism transformation, and addressing the impacts of COVID-19.

The Bank continues to use analytics to guide project operations, as well as hands-on technical assistance, impact evaluations, policy notes, and broader reports to inform the lending programs and policy dialogue.

Last Updated: Mar 24, 2023

Urban Development, Resilience, and Land

Tanzania’s urban population is growing rapidly, and while its cities are critical for economic growth, the opportunities of urbanization have not been fully captured. The country’s overall urban population growth is the second-fastest among eleven Sub-Saharan African countries with comparable urbanization trends. The share of the total population residing in urban areas increased from 27.4 to 34.5% between 2009 and 2019 and half of the population is expected to live in cities by 2050.  The World Bank has provided long-standing support to Tanzania’s urban sector and since 2011 has financed over $1 billion in infrastructure investments and institutional strengthening in the areas of urban management, planning systems, service delivery, and own source revenue collection. The current portfolio consists of three lending projects: Tanzania Cities Transforming Infrastructure (TACTIC) Project, Land Tenure Improvement Project (LTIP), and the Boosting Inclusive Growth for Zanzibar: Integrated Development Project (BIG-Z). The Tanzania Strategic Cities Project (TSCP) and Urban Local Government Strengthening Program for Results (ULGSP) closed in 2020, and together supported infrastructure and institutional strengthening in 26 medium and small Local Government Authorities (LGAs). The Tanzania Urban Resilience Program, a United Kingdom financed fund executed between 2018 and 2023, provided strategic and analytical support to enhance urban resilience in Tanzania.

Some of the key results of the World Bank’s engagement in urban development, resilience, and land include:

·       24 secondary cities and smaller cities and towns have built the capacity to develop city master and spatial, drainage and sanitation, and solid waste plans, and have set up revenue collection systems. These cities benefited from investments in 432 km of new roads; 48 km of drainage; 7 landfills; and 21 bus terminals.

·       In Dar es Salaam, over four million people have benefited from the infrastructure developed including 207 kilometers of roads, which include street lighting, sidewalks and roadside drainage. Community amenities in 14 low-income areas were upgraded, and provided with widely used health facilities, recreational public spaces, water kiosks, and markets. Seventy-five kilometers of trunk and secondary drains have been constructed in five river basins together with the city’s first stormwater detention basins. Together these are protecting 406 hectares of land including many low-income neighborhoods from one-in-10-year flood events.

·       Nationally, tools have been developed to improve urban resilience, data, and information. These have supported flood modelling input into drainage plans; they have enhanced building codes and resilience of heritage buildings to climate change and have supported the setting up of a climate risk database. In addition, a Resilience Academy was established to build the skills of the next generation of climate professionals in Tanzania through training programs for data collection.

·       In Zanzibar, World Bank financing has resulted in the construction of 19.5 km of stormwater drainage infrastructure; 11km of solar street lighting; the upgrading of the sea wall in the historic Stone Town; a sanitary landfill and community infrastructure including footpaths, markets, bus parks, abattoirs, and public gardens.

Strengthening Policymaking and Statistical Capacity

World Bank support is generating data and strengthening statistical capacity to support better policy making in Tanzania. The objective of the Development Support for Tanzania Statistics Project, (started in December 2020), is to strengthen the collection, processing, and dissemination of data and statistics on living standards, labor markets, and agriculture. Project support assisted the National Bureau of Statistics and the Office of the Chief Government Statistician Zanzibar to complete and disseminate the National Sample Census of Agriculture (NASC), the Integrated Labor Force Survey (ILFS), and the National Panel Survey (NPS). Further support  is providing short statistical training courses to over 700 officials from the Tanzania Statistical System.

Some key results:

·       Updated agricultural statistics from the 2020 NASC were instrumental in a debate around the weak coverage of extension services and the low area under irrigation and informed a government decision to increase the national budget allocation for agricultural extension services and to bolster irrigation facilities. The National Livestock Policy of 2006 and the National Livestock Sector Transformation Plan are being updated based on findings from the 2020 NASC. The Agriculture Routine Data System (ARDS), a data collection and reporting system of Tanzania’s agricultural sector, was also updated using data and statistics from the NSCA. The data collected, stored, and reported through the ARDS are used at various levels of the government, LGAs, Regional Administrations and Ministries for monitoring plans and implementation within the agricultural sector.

·       The completion of the 2021 ILFS was timely as the findings provided important background data and reinvigorated debates on the need to improve labor market outcomes. These debates have led to the ongoing revision and update of the 2008 National Employment Policy, and the 2007 National Employment Creation Program. The 2021 ILFS has been further analyzed to produce a monograph publication on the gendered dimensions of the labor market outcomes in Tanzania as well as gender and inter-sectoral shifts in employment outcomes which featured in the 2022 Zanzibar Poverty Assessment.

·       Wave 5 of the NPS was produced and disseminated in January 2023 to provide comparable and high-quality data to update information on the poverty trajectory of the country. The 2021 NPS has provided data to analyze and compare the current 14-day diary with a new 7-day recall for daily consumption measurement as part of the effort to harmonize poverty measurement in the East African Community. The High-Frequency Welfare Monitoring Phone Survey (HFWMPS) has provided timely and valuable information to the government and development partners to monitor and mitigate the COVID-19 impact on households.

·       The anonymized micro-data of the NASC, ILFS and NPS have been made available online and a call for research proposals has been issued for Tanzania researchers to use the data to produce a minimum of 6 policy briefs to inform the formulation and implementation of development initiatives in the country. These policy briefs are expected to be ready for stakeholder consultation by May 2023.

·       Technical assistance and capacity building were provided to the NBS, OCGS and Sector Ministries to implement the NASC, ILFS, and NPS, and enhance the statistical capacity of the officials from the Tanzania Statistical System to use and analyze the available data to inform policy processes in the country. In total, 757 officials have been trained in such short courses as data analysis and reporting, data capture methods, sampling methodology, as well as statistical project management. Female participation rate across all the trainings stands at about 35%. Training evaluations and tracer studies conducted revealed that over 95% of the staff trained can apply what they have learned, and about 70% are applying what they have learned in their day-to-day assignments.

Last Updated: Mar 24, 2023

Partnering with other development organizations for lending and analytical work has been at the core of the WBG’s CPF in Tanzania. Several large lending programs, such as the Productive Social Safety Net Project, the BOOST Primary Student Learning Program-for-Results, and the Dar es Salaam Maritime Gateway Project, are co-financed by bilateral donors, including Sweden, the United Kingdom, and the United States. The Msimbazi Basin Development Project has been co-financed by the Netherlands Ministry of Foreign Affairs and the Spanish Agency for International Development Cooperation.

Last Updated: Mar 24, 2023