Tanzania’s ongoing macroeconomic reform program has received a boost from the African Development Bank through a US$40- million budget support loan to be provided by the African Development Fund, the concessional arm of the Bank Group.
The budget support facility is being managed under the Bank’s Good Governance and Private Sector Development Program (GGPSDP). The first phase of the GGPSDP reinforces Tanzania’s Blueprint for Regulatory Reforms to Improve the Business Environment and forms part of the US$80 million two-year programmatic budget support for the East African nation, covering the fiscal year 2017/18 and 2018/19.
Specifically, the program promotes the country’s transition towards inclusive and resilient private sector-led economic growth agenda, backed by improved economic and financial governance.
In approving this budget support loan, the Board of Directors of the Bank appraised Tanzania’s economic management and considered ongoing efforts to achieve public sector budget credibility, macroeconomic stability, a condusive climate for private sector development and an effective procurement systems and audit services.
The Bank’s intervention will enhance the viability of Private, Public-Sector Partnerships (PPPs) and support improvements in the institutional, legal and regulatory framework for business operations in Tanzania.
It will also build on prior Bank operations in the country, notably the Governance and Economic Competitiveness Support Program, Power Sector Reforms and Governance Support Program implemented during 2015-2017. The program complements the Bank’s Institutional Support Projects for Good Governance and the Domestic Resources Mobilization and Natural Resources Governance Project.
Commenting on Tanzania’s ongoing economic reforms, Soraya Mellali, Executive Director for Algeria, Guinea and Madagascar at the Bank said that “Tanzania’s economic reform program is on course and the country is committed to strengthening competitiveness and development of the private sector. The budget support loan would further aid this process.”
The funding is aligned to pillar II of the Bank’s Tanzania Country Strategy Paper, Strengthening Governance and Accountability, and two of the five operational priorities of the Bank Group’s Ten-Year Strategy (Private Sector Development, and Governance and Accountability).
It also supports the core priorities of the Bank’s Governance Strategic Framework and Action Plan, and the Private Sector Development Strategy for Tanzania.
It is consistent with two of the Bank’s High 5 priorities: “Industrialize Africa” and “Improve the quality of life of the people of Africa.”