DPG Tanzania

Background

Budget Support work in Tanzania 

The Budget Support group is led by a Management Group (MG). The group consists of two rotating members chosen for periods of three years each, and two members that are chosen based on set criteria: 1) largest provider of GBS through grants; and 2) largest provider of budget support through loans.

Currently the Management Group consists of Finland (Chair), EU (Deputy Chair), the World Bank and DFID. 

Budget Support in Tanzania is currently being provided by nine bilateral donors (countries) and three multilateral agencies.

  • AfDB
  • Canada
  • Denmark
  • European Commission
  • Finland
  • Germany
  • Ireland
  • Japan
  • Norway
  • Sweden
  • UK/DFID
  • World Bank

 

Budget Support can be provided to countries, which are politically stable, have carried out successful economic reform programs, have initiated governance reforms and which have shown a strong commitment to poverty reduction. 

In Tanzania, General Budget Support was introduced in 2001 as a successor to the Multilateral Debt Fund (MDF). The MDF was like GBS a form of direct funding channeled to the budget, and aimed at supporting Tanzania in reaching the targets necessary to obtain HIPC (Highly indebted poor countries) relief. As these targets were reached, donors decided to move to General Budget Support. 

The main reasons for introducing GBS were the desire to increase national ownership and to harmonize donors’ activities in Tanzania. The aim was to achieve poverty reduction results more efficiently.

The first evaluation of General Budget Support (1995-2004) confirmed that the modality indeed contributed to an increased sense of ownership of the development process by the Government of Tanzania. It also found that Budget Support improved donor harmonization significantly and made positive contributions to policy design.

The second evaluation of Budget Support in Tanzania 2005/6-2011/12 showed that Budget Support had made significant contributions to improved education, health and financial management standards in the country.

Dialogue and results 

The Government of Tanzania and its Budget Support Development Partners agree on the need to make Budget Support more effective in order to achieve results in service delivery and poverty reduction. The policy dialogue between Government and DPs is therefore focused on Tanzania’s priorities and on how DPs can support that these are achieved.