Washington — Today the World Bank Board of Executive Directors approved two new financing operations for Tanzania: a $750 million Development Policy Financing (DPF) operation set to support private-sector led recovery in Tanzania and $385 million for phase two of the Dar es Salaam Metropolitan Development Project (DMDP) to improve urban services, institutional capacity and climate resilience in Dar es Salaam.
The Tanzania Second Inclusive and Resilient Growth Development Policy Financing, which builds on the success of the first DPF approved in December 2022, will leverage International Development Association (IDA)* financing to address longer-term structural challenges that have hampered economic growth and unleash private sector-driven recovery by providing a significant boost to ongoing reforms that are aimed at improving the business climate, strengthening the management of SOEs, improving transparency, and fostering economic resilience.
"We commend the Government of Tanzania for adopting reforms to foster more inclusive, private sector driven, and resilient growth, while navigating challenges posed by unprecedented global events," said Victoria Kwakwa, World Bank Vice President for Eastern and Southern Africa. "We are committed to supporting Tanzania to deepen reforms that facilitate immediate recovery and strengthen the foundations for sustained, inclusive, and resilient economic growth.
Recent assessments, including the just-released Country Economic Memorandum for Tanzania and the Country Performance and Institutional Assessment show that there are several challenges hindering private sector growth. These include strict licensing requirements to start and run a business, limited access to credit, and costly public sector debts (including Value Added Tax refunds). The assessments also show that it is important to complement the public investment push with stronger social policies to promote inclusion and economic resilience. The DPF aims to help address these challenges.
Thanks to new financing, the second phase of the DMDP will focus on climate-smart priority infrastructure, integrated solid waste management infrastructure and services, and strengthening urban institutions.
"Tanzania remains very vulnerable to climate change and is limited in its preparedness to adapt and respond to the adverse impacts," said Nathan Belete, World Bank Country Director for Tanzania. "Building upon successful prior investments and outcomes achieved through the initial phase of the DMDP, this second phase aims to further fortify Dar es Salaam while improving mobility, livability, and resilience."
The first phase of DMDP improved mobility for 4.1 million people through the construction of 207.8 kilometers of roads, particularly in underserved low-income areas. It also enhanced flood protection for 406 hectares of urban land and upgraded 152 informal settlements which has led to improved living conditions for thousands of residents who now enjoy better access to basic services and amenities.
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*The World Bank's International Development Association (IDA), established in 1960, helps the world's poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people's lives. IDA is one of the largest sources of assistance for the world's 74 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.3 billion people who live in IDA countries. Since 1960, IDA has provided $458 billion to 114 countries. Annual commitments have averaged about $29 billion over the last three years (FY19-FY21), with about 70 percent going to Africa. Learn more online: IDA.worldbank.org. #IDAworks
