Country Brief

                                           Country Brief last updated March 2008

Tanzania is one of the poorest countries in the world. Per capita income in 2006 was about US$350. Life expectancy at birth is 51 years.

Nevertheless the country's firm commitment to poverty reduction, as spelled out in its Poverty Reduction Strategy (PRSP in Tanzania called the MKUKUTA see below), and the World Bank's and other Development Partners' contributions led to a couple of development results, which brought the country closer to reaching the Millennium Development Goals: 

• A 2005 demograhic and health survey found that infant mortality rates had dropped from 88 (per 1,000 live births) in 2000 to 68 in 2004 and that child mortality had decreased from 141 in 2000 to 112 in 2004.  
• Net enrollment rates for primary schooling of boys and girls increased from 51 percent in 2000 to 98 percent in 2006.
• The percentage of the population with improved access to water increased from 46 percent in 1990 to 62 percent in 2004.
• Since the last household survey in 2001, poverty projections based on the national poverty line show a decline in rural poverty incidence from 38.6 percent in 2001 to 33.8 percent in 2004.  However, these poverty projections come with uncertainties and a much lower decline of 36.1 percent in 2004 may be realistic. Outcomes from a new household survey are expected in early 2008.

Tanzania’s economic performance continues to be strong, despite 2006 drought with negative impacts on agriculture growth and electricity generation.   Since 2000, Tanzania’s real GDP has grown at an annual rate of about 6.3 percent.  A drought in early 2006 reduced growth of agriculture to about 3.7 percent from 5.2 percent in 2005. The drought also led to a sharp decline in hydro-generation capacity.  While load shedding of up to 12 hours primarily affected households, it also impacted industry and the service sector, with growth in the manufacturing sector slowing down to 7.5 percent in 2006 compared to 9 percent in 2005.  Growth has picked up recently and is estimated to have been about 7 percent in 2007.

The Government's Poverty Reduction Strategy

The MKUKUTA was developed through a participatory process and identifies outcomes and goals around three clusters:

1. Growth of the economy and reduction in income poverty;
2. Improvement of quality of life and social well-being;
3. Governance and accountability.

The focus is on economic growth, centered around agriculture and rural development, and further strengthening of the business environment to boost private sector-led growth and export diversification.

A new Joint Assistance Strategy for Tanzania (JAST) which includes planned support toTanzania from the 35 members of the Tanzania Development Partners Group (DPG) over the 2007/08-2009/10 period was discussed by the World Bank Executive Directors in April 2007.

The JAST---developed jointly with all 35 members of the DPG---includes the Government-led national medium-term framework to improve donor collaboration in support of Tanzania’s development and poverty reduction goals, a joint country analysis and DPG planned support and aid effectiveness commitments to Tanzania over the 4 remaining years of the MKUKUTA.

Part IV of the JAST lays out the specific support that each agency will provide to the country. In the case of the World Bank Group, the final section describes the its strategic approach and proposed program over the 2007-10 period, including ongoing and planned advice, analytic work and financing. The new strategy includes more than of US$2.3 billion in IDA lending over the period.

World Bank Assistance to Tanzania

Tanzania joined the World Bank Group in 1962.  Beginning with a credit from the World Bank's International Development Association (IDA) for education in 1963, over US$5.8 billion in credits and US$274 million in grants have so far been approved.  Currently, the portfolio comprises of 22 active projects with commitments of $1.7 billion in all major sectors.  The undisbursed balance stands at $1.1 billion.

Projects and programs that have been approved more recently include (in US$ million): 

• Energy Development and Access Expansion ($105)
• Performance Results and Accountability ($40)
• Go here to see: All Projects 

There is close interaction with the International Monetary Fund (IMF)on the macroeconomic program.

The  International Finance Corporation's(IFC) strategic focus in Tanzania is on the financial, agribusiness, tourism, infrastructure and SME sectors.  Activities include a $10 m investment in Bonite Bottlers a carbonated soft drinks manufacturer, a $5 m trade facility to Exim Bank, a $5 m line of credit to Exim Bank to support their lending program to women entrepreneurs, a $5 m Tier II facility to Stanbic Tanzania . 

Tanzania became a member of the Multilateral Investment Guarantee Agency (MIGA)in 1992.  At present, MIGA does not have any exposure in Tanzania  and no projects in its pipeline.

The World Bank Institute (WBI) focuses on the following areas: (i) Support to oversight institutions (media and parliament); (ii) Economic competitiveness (public private partnership and financial sector management); (iii) Support to enhance service delivery (water and nutrition). The Global Development Learning Centerwas launched by WBI in 2000.