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Tanzania

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Development potential
Priority areas of cooperation
Water supply and sanitation
Health, including HIV/AIDS prevention
Decentralisation and local government
Debt relief

Situation and cooperation

Tanzania's "Afri­can so­cialism" is over. But the tran­si­tion from a cen­tral­ist eco­no­my under one-party rule to a liberal, free-market eco­no­my and a plu­ral­istic, multi-party de­mo­cra­cy still poses major chal­lenges for Tanzania.

Harbor Tanga, Tanzania, Copyright: BMZSeveral political parties are now in existence. Yet what used to be the sole political party still plays a dominant role in the state, largely because the new parties are not equipped with the necessary human and financial resources. Cooperation and part­ner­ship with civil society have improved markedly, but still need to be fully realised on all levels.

Compared with other countries in the region, Tanzania is per­form­ing fairly well in the areas of governance, anti-corruption and public financial management. However, progress on im­ple­ment­ing important reform programmes is slow on account, among other things, of inefficient public administration and the lack of qualified personnel. Although anti-corruption laws have been passed and the relevant supervisory authorities set up, anti-corruption mea­sures are not being effectively implemented.

The Tanzanian economy depends heavily on agriculture. This sector accounts for around 28 per cent of gross domestic product (GDP) and provides a livelihood for some 80 per cent of the po­pu­la­tion. The principal export products are coffee, cotton, tea, to­bac­co, sisal and cashew nuts. Services are the second most im­por­tant economic sector. This sector has grown steadily in recent years – due to significant increases in tourism, tele­com­mu­ni­ca­tions and finances – and now accounts for around 39 per cent of gross domestic product.

Arusha, Tansania: Coffee, one of the most important export goods. Copyright: photothek.netEconomic growth stood at around 7 per cent for many years. The global economic and fi­nan­cial crisis in 2008/2009 dam­pen­ed growth for a while, but by 2010 Tanzania's eco­no­my had re­cover­ed. However, development is not sufficient to reduce po­ver­ty effectively, partly due to the high rate of population growth. Tanzania is still heavily dependent on external funding. Around one third of the national budget is funded by donors.

The Government of Tanzania has announced its intention to step up its promotion of the private sector, but the business and in­vest­ment cli­mate in the country is poor. The private sector is still over-regulated, and bureau­cratic barriers to the issue of licences and permits to private enterprises still hold back potential entre­preneurs from launching initiatives. There are also serious defi­cien­cies in the energy and trans­port infra­struc­ture. Most entre­pre­neurial activity takes place in the informal sector, with the result that the state loses out on vital revenues.

Due to the prevalence of malaria and HIV/AIDS, life expectancy in Tanzania is low (2009: 56 years). Despite progress made in re­cent years, for example on school enrolment rates, HIV pre­va­lence, and infant and maternal mortality, there is still a great need for improvement in the provision of education and health. As a consequence of traditional social structures, women are par­ti­cu­lar­ly affected.

Tanzania will, however, achieve at least some of the Millennium Development Goals by 2015 provided the reforms already ini­ti­ated continue to be implemented and expedited.

Development potential

Potential for sustainable development does exist. Only a re­la­tive­ly small percentage of existing farmland is actually being used for farming. Production could be further diversified, thus reducing Tanzania's economic dependence on individual products and their world-market prices. There is already strong demand for new niche products such as cut flowers, fruit and vegetables. Furthermore, markedly higher profit margins would be possible if Tanzania could export refined and not just unrefined products. For instance, the further processing of agricultural produce could generate new jobs if the framework conditions for small and medium-sized enterprises (SMEs) are improved.

Tarangire National Park in Tansania. Copyright: Photothek.netSignificant growth potential exists in tourism. With Mount Kilimanjaro, the Serengeti Na­tional Park, Lake Victoria and beaches along the Indian Ocean coast, Tanzania has much natural beauty that is highly attractive to foreign tourists. The country has large deposits of precious stones and precious metals, and gas and uranium have been discovered. These resources offer huge development potential. The construction industry has also been buoyant since the 1990s.

Tanzania, with its access to the sea, could become a key player in the future as a provider of transport services and a transhipment point for the landlocked states of central Africa. Opportunities are created by the country's membership of the East African Com­mu­ni­ty (EAC). In 2005, a customs union with Kenya and Uganda was established, which Rwanda and Burundi joined later. The Protocol establishing a common market entered into force in July 2010. This aims to greatly facilitate the movement of goods and ser­vices, persons and capital between the five countries.

Priority areas of cooperation

Tanzania is an important partner country of German development cooperation in Africa. At government negotiations in Bonn in April 2009, funds of 147 million euros over three years were committed to the country. Of that amount, the sum of 120 million euros has been allocated to Financial Cooperation and 27 million euros to Technical Cooperation. Within the scope of financial co­op­er­a­tion, 30 million euros are provided in the form of direct con­tri­bu­tions to the Tanzanian budget (budget support). During a visit to Tanzania in April 2010, Federal Development Minister Dirk Niebel authorised a further 8.5 million euros for an HIV and AIDS aware­ness programme. In addition, an amount of 14 million euros was pledged in 2011 to promote Tanzania's national vac­ci­na­tion programme in cooperation with the Global Alliance for Vaccines and Immunisation (GAVI).

The following were agreed with the Government of Tanzania as priority areas of cooperation:

  • Water supply and sanitation

  • Health, including HIV/AIDS prevention

  • Decentralisation and local government.

Tanzania is implementing the Paris Declaration on Aid Effec­tive­ness in an exemplary way. In 2006, donors and the Gov­ern­ment of Tanzania adopted the Joint Assistance Strategy for Tanzania (JAST). This joint strategy is intended to ensure that donor con­tribu­tions are better matched to national reform require­ments and that there is a better division of labour within the donor community.

Water supply and sanitation

African woman at a water fountain, Tansania. Coypright: bpa, ReinekeIt is apparent from Tanzania's water sector, among others, that the coun­try is still at a low level of de­vel­op­ment. Around half the population does not have adequate access to drinking water and sanitation. In places where water is scarce and of doubtful quality, the work of fetching it makes heavy demands on women and children in particular, and di­seas­es such as diarrhoea and cho­lera are common. The main causes of these de­fi­cien­cies are an anti­quated or non-existent infra­struc­ture, and in­ade­quate man­age­ment of the in­sti­tu­tions concerned.

Since the 1990s the general frame­work has greatly im­proved, however. The national water policy developed in 2002 with German support establishes principles such as beneficiary participation, cost recovery, sustainable management of water resources, participation of the private sector, and decentralised management. This marks a break with the failed socialist, centralised administration.

The positive experiences gained with innovative rural and urban water projects, and the national development strategy spon­sored by Germany have made a sub­stantial contribution to re­form­ing the water sector. The Gov­ern­ment of Tanzania, together with the donors, has de­vel­oped an am­bi­tious Water Sector De­vel­op­ment Pro­gramme. More than one billion US dollars are to be invested by 2012 in improving water supplies and sanitation across the country, and 13 million people are to be connected to a water supply.

German development cooperation is embedded in this Gov­ern­ment of Tanzania programme. Contributions are being made in the following areas:

  • Infrastructure (rural and urban water supply)

  • Supporting the implementation of sector reforms

  • Institutional development and capacity building

  • Support for commercial water supply companies

  • Improving donor coordination.

Germany's engagement has already spawned some major suc­ces­ses. In the programme for Arusha Region, for example, the per­cent­age of the po­pu­la­tion con­nect­ed to the water supply has in­creased from 75 to 98 per cent. Water losses have been halved, to 26 per cent, and the annual revenue of the mu­ni­ci­pal water utility has in­creased fivefold to 2.1 million euros (local equivalent). In the period from 2007 to 2010, 4.5 million Tan­za­nians were connected to the water mains. The incidence of water-borne diseases has been substantially reduced.

Health, including HIV/AIDS prevention

HIV infected girl in Tansania, on her right the red ribbon AIDS symbol. Copyright: Ute Grabowski/photothek.netThe Tanzanian health sector faces many chal­lenges: life expectancy of 56 years, a high rate of maternal mor­ta­lity, and annual po­pu­lation growth of 2.9 per cent. At the same time, there is a serious shortage of trained staff; it is estimated that over 60 per cent of posts cannot be filled with ap­pro­pri­ately qualified appointees.

The Government of Tanzania has responded to this situation with comprehensive reforms. Its aims are: decentralisation, improving access to primary health care, human resource development to overcome staff shortages, establishing a sustainable system of health financing, setting up a social health insurance system, private sector participation, and measures to control HIV, malaria and tuberculosis.

Germany concentrates in its development cooperation on im­prov­ing the health status of at-risk and dis­ad­vant­aged sections of the population. Geo­gra­phic­ally, the focus is on the regions of Tanga, Lindi, Mtwara and Mbeya, with a population of around 5.6 million. Reform processes are being supported in four main areas:

  • Sexual and reproductive health and rights, including HIV/AIDS prevention

  • Health financing and social health insurance

  • Human resources and capacity building

  • Decentralised health services (including development partnerships with the private sector (PPP).

In close consultation with other donors, Germany is supporting the preparation of a long-term strategy on health financing. This includes support for social security systems in order to offer poor population groups access to health services and prevent im­po­ver­ish­ment in the event of illness. Further­more, German de­vel­op­ment co­op­er­ation is advising the Gov­ern­ment of Tan­za­nia on co­op­er­ation between state and private (often church) or­ga­ni­sa­tions. In the field of reproductive health and HIV prevention, Germany advocates a human rights-based approach which aims to reduce dis­cri­mi­na­tion and provide full access to information and services.

The German contribution has helped to secure the significant pro­gress made in Tanzania's health sector, including im­prove­ments in the provision of de­cen­tra­lised health care services, a sub­stan­tial reduction in child mortality, and a reduction in the rate of HIV infection (from 7 per cent in 2004/5 to 5.7 per cent in 2009/10). Tanzania has also achieved high im­mu­ni­sation cover­age and made progress towards controlling malaria and tuberculosis.

Decentralisation and local government

The aim of Tanzania's decentralisation policy is to transfer more competencies, responsibilities and resources to the municipalities. For a country which was once centrally governed, this represents a radical change in the state’s administrative and power struc­tures. The aim is to create well performing, efficient and trans­pa­rent local authorities and thus improve public services (health, education, water, agriculture) especially for the poor population.

Germany, in concert with other donors, is supporting the process of decentralisation. Under a sector-wide approach, German development cooperation is concentrated on the following areas:

  • creation of a legal framework for decentralisation

  • fiscal decentralisation

  • promotion of good governance at local level (especially to strengthen participation, transparency and accountability and to combat corruption)

  • a financial contribution to Tanzania’s national system for the transfer of financial resources to local government.

The new system of financial transfers, designed to shift significant investment resources from central to municipal level, has been successfully introduced. The improved performance of local authorities is reflected in good audit results and a higher rate of public satisfaction with service delivery.

Debt relief

Tanzania has been participating in the enhanced HIPC Initiative since April 2000 and reached completion point in November 2001. Some 3 billion US dollars in debt were then cancelled. Spending on social welfare has risen sharply in a few key areas, thanks to the funds that have been freed up.

As a country which has reached completion point, Tanzania also benefits from the Multilateral Debt Relief Initiative (MDRI) agreed by the G8 countries in Gleneagles in June 2005. Tanzania was released from all debts to the International Monetary Fund (IMF), the World Bank's International Development Association (IDA) and the African Development Fund (ADF). The freed-up funds must be used to reduce poverty and increase growth. Total debts worth some 6.8 billion US dollars have been cancelled under the two programmes. Germany has cancelled all of Tanzania's debt, which totalled about 338 million euros.

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