20 April 2019

Tanzania: Is Tanzania Back in Bed With Bretton-Woods Institutions?

Photo: https://unsplash.com
Victoria, Dar es Salaam.

Tanzania seems to have restored relations with the top international lenders, with the World Bank endorsing $1.7 billion to fund various projects in the 2019/20 financial year.

Comprising mainly low-interest loans and grants, it is the first concrete deal between the two parties since a disagreement over the government's position on various issues appeared to have been resolved.

The amount itself, representing a sizeable chunk of Tanzania's planned 2019/20 national budget, signifies one of the biggest financing deals ever made with the lender.

The World Bank last year pulled out of a similar $300 million educational loan agreement with Tanzania due to concerns over a government announcement that girls impregnated while still at school would not be allowed to resume studies after giving birth, as well as a controversial law prohibiting publication of statistics on any subject matter that have not been verified by the state.

But the Bank later backed down and said the aid suspension had been lifted after President John Magufuli offered "assurances" of a softening in his administration's stance on these and other matters including LGBT rights.

But a World Bank spokesperson also told The EastAfrican this week that the latest aid package did not necessarily mean that the matter had been laid entirely to rest.

"The World Bank's position on Tanzania has not changed. New International Development Association funding to Tanzania will require the fulfilment of commitments made by the government," the spokesperson said.

It was signed in Washington with Finance Minister Philip Mpango and central bank Governor Prof Florens Luoga attending meetings with World Bank and IMF officials.

The World Bank's current active engagement portfolio in Tanzania includes 22 IDA projects with total net commitments of $4.23 billion.

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Key sectors supported are transport (25 per cent), urban development (19 per cent), energy (15 per cent), water (11 per cent), education (9 per cent), social protection (8 per cent), health/nutrition (4 per cent), and environment/natural resources (4 per cent), while agriculture, finance, competitiveness and innovation and governance projects complete the portfolio.

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