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Infrastructure and trade become donor babies
2008-05-12 09:16:10
By Perege Gumbo
A huge portion of the European Union (EU) Euros 555m (950bn/-) general budget support to Tanzania for five years goes to infrastructure development and trade development.
An analysis of the National Strategic Paper and Country Indicative Programme shows that the two development areas would receive massive funding.
For instance, allocation to infrastructure, communication and transport alone has been set at Euros 139 million which is about 25 percent of the entire funding.
On the other hand, trade and regional integration`s allocation amounts to Euro 55.5 million or 10 percent of the total EDF financial envelop.
The reason for allocating significant share to the two areas was born from the fact of their overall importance and support to the entire productive sectors of the national economy.
The EU, through its tenth European Development Fund (EDF), is expected to provide the money in the form of grants under the National Indicative Programme (NIP).
Funding would trickle for five years and was an important condition to the signing of Economic Partnership Agreements (EPAs).
``Approximately Euro 305 million (55 percent of the allocation) will be set aside for General Budget Support (GBS) and approximately Euro 139 million for sectoral budget support (about 25 percent)`` the country strategy paper states in part.
The EU says new financial commitments are due to Tanzania’s good track record under the Poverty reduction Budget Support (PRBS) framework, particularly in 2006.
During that year, 14 development partners contributed Euros 500 million and government`s firm commitment ensured good delivery, the reason donor community has decided to scale up budget support.
``The government has demonstrated its commitment to performance-oriented monitoring and to further strengthening its public Finance management programme``, it says.
The Country Strategy Paper further shows that the EU-GBS programme would also involve capacity building to strengthen economic management, including decentralisation much so by focusing on Public Financial Management Reform in Zanzibar.
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