World Bank supports Tanzania to strengthen public finance and investment climate; lay ground for natural gas exploitation

March 26, 2013

WASHINGTON, March 26, 2013 – The World Bank Board of Executive Directors today approved an International Development Association (IDA) credit of US$75 million as direct budget support to further strengthen the sound management of public finance and improve investment climate in select strategic areas.  

This is the second in a series of three annual programmatic development policy operations (DPOs) in support of Tanzania’s implementation of its poverty reduction strategy, MKUKUTA II, complemented by the Five Year Development Plan I (FYDP I). The PRSC series is well aligned on the harmonized framework for the General Budget Support (GBS) in Tanzania, which the World Bank participated together with 11 other development partners.

"The continuation of budget support is an acknowledgement of the progress in implementing the first operation in the series which focuses on promotion of private sector growth and development; and improvement of fiscal policy and management.  We are confident that we shall successfully complete the series because our reform agenda has remained on track,” said Ramadhani M. Khijjah, Permanent Secretary - Treasury, Ministry of Finance in Tanzania.

The operation supports the Government of Tanzania’s reforms, particularly in 5 areas:

  • enhanced efficiency and transparency in domestic revenue mobilization
  • sound public investment management including public private partnerships
  • improved quality of budgets and a stronger public financial management system
  • effective institutions for promoting and regulating special economic zones
  • improved investment climate as a regional transit hub

Through focuses on those areas, the operation supports the Government’s effort to ensure macroeconomic and fiscal sustainability and safeguard benefits from growth by building resilience of the economy in the volatile global economic environment and as the country faces growing demand for investment to fill infrastructure gaps.  The operation also helps the country to build competitiveness for much-needed economic diversification and fostering shared growth in the country by leveraging its geographical advantage as a coastal transit country for the region and facilitating industrial agglomeration. 

The five reform areas above will be hinged on the foundation of improved transparency and access to information as an accountability tool in the country. 

“Budget transparency is a critical component of government performance, especially in the energy sector.  Proactive information sharing, public access to data, and accurate and timely statistics, are policy priorities for the Tanzanian authorities, and we are delighted to support their efforts.  These include the all-important transparency in managing revenues from natural resources, especially gas and minerals.” said Marcelo Giugale, Director of Poverty Reduction and Economic Management for the Africa Region.

Tanzania was declared EITI compliant on December 12, 2012. The Tanzania Extractive Industries Transparency Initiative (TEITI) has committed to making public the information on payments and revenues especially related to minerals including natural gas, and possibly oil in the future. TEITI hopes that by this openness, it will build trust between citizens and their Government.

This PRSC series complements a $100 million development policy operation in the power and gas sectors.

The World Bank’s current portfolio in Tanzania consists of 23 IDA-financed projects with a net commitment of approximately US$ 3.1 billion making it the 3rd largest country program in the Africa region.


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