DPG Tanzania

Overview of Aid in Tanzania

Tanzania has in the recent past been one of the largest recipients of aid in Sub-Saharan Africa. In the financial year 2010-11, approximately 33% of Government spending was financed by foreign aid.

 There are three aid modalities in Tanzania:

  1. General Budget Support as the most preferred mode since it is consistent with the government’s legal framework and processes,
  2. Basket Funds, and 
  3. Direct project funds. 

 Despite GBS being the preferred aid modality for the Government of Tanzania, a large proportion of development assistance to Tanzania continues to be delivered through the project modality which in many instances remain off-budget and outside the government system. As a result more efforts are being taken to encourage more DPs to shift away from the individual programmes and area based projects towards programme-based interventions

 The value of donor financing (external grants and concessional loans) relative to total government expenditure has declined dramatically over the past decade, sinking from 44 percent in 2004/05 to 19 percent in 2013/14. It is estimated that it has dropped further to 14 percent in 2014/15. In contrast, external non-concessional loans have started taking a substantial share in financing the budget.

 Yet even as Tanzania has become less dependent on aid, it still faces large fiscal challenges meeting its development objectives. External aid, including concessional loans, still provides more than 10 percent of the Government budget and a disproportionate share of the financing for development and investment.

 The largest aid contributor to Tanzania is The World Bank, USA, the AFDB, UK and EU.

Aid Management Platform

Aid management in Tanzania is guided by the Joint Assistance Strategy (JAST) jointly developed by the government and development partners in order to enhance aid effectiveness at country level. Furthermore, the Government has since 2007 been implementing the Aid Management Platform (AMP) System to strengthen ability of Government to capture information on Official Development Assistance (ODA), including planning, tracking and reporting of the development assistance flows (General/Sector Budget Support, Basket funds and project funds).

The AMP platform seeks to improve the transparency and reliability of aid flow data, providing data on aid to local government, regions, non-state actors, as well as development partners. In addition, the platform aims to foster linkages between the Medium-term Expenditure Framework, Integrated Financial Management System, Aid Management Platform and Strategic Budget Allocations.

For more information on AMP please click here.

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