GRIPS Development Forum > Diversifying PRSP > Ch2. Global Development Trend and PRSP

Tanzania Poverty Reduction Strategy Paper

Relationship with Existing Development Policies/Plans
Following the introduction of a series of structural adjustment measures begun in 1986, the Tanzanian Government (GoT) formulated a new national development plan, "Vision 2025", in 1999 which describes the national vision of economic and social objectives to be attained by the year 2025. And against this plan, the "National Poverty Eradication Strategy (NPES)" was elaborated to establish a national strategy and objectives for poverty reduction efforts through 2010.

Since the middle of 1990s, Tanzania-donor relations have been intensively reviewed to enhance aid effectiveness. The Helleiner Report (Report of the Group of Independent Advisers on Development Cooperation Issues between Tanzania and Its Aid Donors, [Helleiner, et al. 1995], funded by Danish government) and the adoption of the Agreed Notes (in January 1997) triggered the process of building a new relationship. Also, Tanzania has become a CDF pilot country in 1999. Building on such dialogue with donors, GoT has developed the Tanzania Assistance Strategy (TAS) as an operational framework for managing donor resources including aid modality (2002).

GoT introduced the Medium-Term Expenditure Framework (MTEF) in 1998 for annual, rolling 3-year expenditure planning.

Based on these antecedents, Tanzania's PRSP focuses on pro-poor targeted measures to be carried out within hard (central government) budget constraints, starting from FY2000/2001, and various extra-budgetary and non-financial activities.

The Process of Formulation
As Tanzania's PRSP was formulated under time pressure to meet the HIPC process, several aspects remain incomplete. These are expected to be developed further in the Progress Report, which is to be presented annually.
  • 2000 April: Interim-PRSP and HIPC II decision point
  • 2000 October: Full-PRSP
  • 2001 August: 1st PRSP Progress Report
  • 2001 November: HIPC completion point (NPV $2,026 million of debt relief)
Strategic Priorities
While recognizing growth promotion measures, Tanzania's PRSP primarily focuses on pro-poor targeted measures as follows.
  • Income poverty: sustaining macroeconomic stability, rural sector development and export growth, and private sector development.
  • Human capabilities survival and well-being: education, health, social well-being, and vulnerability and the environment.
Relationship with Budget System
PRSP's strategic priorities are reflected in the national budget process, through the already existing MTEF and PER mechanisms. The priority sectors are education, health, water, agriculture, roads, judiciary and HIV/AIDS.

Under the three-year MTEF, the budget allocated to the priority sectors is more than 30% of total expenditure in FY2000/01 and expected to exceed 40% in FY2001/02.

Among priority areas, education, health, water, roads and HIV/AIDS have received almost adequate budget allocation for FY2001/02 based on respective sector development strategies/action plans (formulated in order to achieve the targets specified in PRSP). In the case of agriculture, following the finalization of the Agricultural Sector Development Strategy (ASDS), GoT is currently preparing an action plan to cost needed interventions for FY2002/03.
(Note: As of early August 2002, the agricultural sector received increased budget allocation for FY2002/03, based on ASDS finalization.)

Aid Modality
Tanzania's PRSP mentions the Tanzania Assistance Strategy (TAS) as "useful framework of organizing periodic consultations and dialogue among all development partners[PRSP p.3]." The TAS recommends donors to adopt the joint actions approach, harmonized rules and procedures. The TAS (finalized in June 2002) has specific reference to aid modality and encourages joint action approach, harmonized rules, on-budget of aid and the promotion of basket fund, etc. as undertakings by donors [Ministry of Finance, 2002].
Helleiner, Gerald et al. [1995], Report of the Group of Independent Advisers on Development Cooperation Issues between Tanzania and Its Aid Donors. Royal Danish Ministry of Foreign Affairs.

Ministry of Finance [2002], Tanzania Assistance Strategy (A Medium Term Framework for Promoting Local Ownership and Development Partnerships), Final Draft, January. [].

The United Republic of Tanzania [2000], Poverty Reduction Strategy Paper (PRSP), October.

The United Republic of Tanzania [2001], Poverty Reduction Strategy Paper, Progress Report 2000/2001, August. [].

IMF and IDA [2001], "Tanzania Poverty Reduction Strategy Paper Progress Report, Joint Staff Assessment," November 1. [].

*This note was written by GRIPS Development Forum.