The African Development Bank Group has approved a significant loan of $107.8 million to Tanzania in a move aimed at bolstering governance, strengthening industrial competitiveness, and reinforcing social inclusion. The loan is a crucial component of the Economic Competitiveness and Social Inclusion Programme (ECSIP), designed to support Tanzania's sustainable recovery from the challenges posed by the Covid-19 pandemic and Russia's invasion of Ukraine.
Tanzania's country manager for the African Development Bank Group, Patricia Laverley, emphasized the loan's importance in promoting policy dialogue with other development partners. This financial support will facilitate discussions on various critical areas, including domestic resource mobilization, public financial management reforms, anti-money laundering and counter-terrorist financing measures, industrial development and competitiveness, and the reinforcement of social protection through reprioritization of public expenditures in Tanzania.
The ECSIP comprises three key components that form the foundation of its objectives. The first component aims to promote reforms that enhance domestic resource mobilization while strengthening public expenditure and procurement systems. The second component focuses on improving the management of environmental resources and creating an investment-friendly climate. The third component aims to enhance social protection and improve the livelihoods of vulnerable groups, including small and medium enterprises, women, and youth.
Throughout the past decade, the African Development Bank has been actively supporting Tanzania in implementing critical reforms, making the country more attractive to businesses and investors. However, Tanzania's fiscal progress has faced challenges due to global economic headwinds. The average growth rate, which was nearly 7% before the Covid-19 pandemic, is estimated to have slowed to 4.8% in 2022.
The ECSIP is expected to directly benefit several government ministries and entities, including the Ministry of Community Development, Gender, Women, and Special Groups, as well as the Revenue and Public Procurement Regulatory Authorities. Additionally, businesses across mainland Tanzania and Zanzibar will gain increased access to investment opportunities, enabling expansion and growth.
This loan and the ECSIP align with the African Development Bank's Tanzania Country Strategy Paper 2021-2025, as well as the Ten-Year Strategy, which extends until 2023. Furthermore, it supports the bank's Strategy for Economic Governance in Africa (2021-2025) and the Climate Change and Green Growth Action Plan (2021-2025).
As of 28 February 2023, the African Development Bank's portfolio in Tanzania comprised a total of 21 sovereign and three non-sovereign operations, with commitments amounting to $2.65 billion. Notably, 86% of these operations are concentrated in the infrastructure sector, with a specific focus on energy, transport, and water and sanitation.
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