EU to Support Tanzanian Budget with EUR 205 Million
Mr Doto James, Permanent Secretary of the Ministry of Finance and Planning, and H.E.
Roeland van de Geer, Head of the European Union Delegation to Tanzania and
the East African Community, signed on 3rd March 3017 the Financing Agreement
for a new budget support program worth EUR 205 million.
The Tanzania Economic
and Fiscal Governance Programme will contribute to the effective implementation
of the Second Five Year Development Plan (FYDP-II) of Tanzania
(2016/2017-2020/2021), by providing direct financial support to the budget and
ensuring that the necessary fiscal policies (i.e. policies in Domestic Revenue
Mobilisation, Public Expenditure Management and Accountability of public funds)
are adopted and followed-through.
The financing is part of EUR 626 million
grant that the EU has allocated to Tanzania under the 11th European Development
Fund (EDF) for the period 2014 – 2020 to support government budget as well as
energy and sustainable agriculture sectors.
Two complementary measures to this
budget support are part of this programme: support to the Tanzania Revenue
Authority (TRA) in their tax modernisation programme and a facility to provide
high-quality research to foster the policy dialogue on economic governance.
The
funds will be disbursed in four yearly payments depending on progress made by
the Government of Tanzania in the areas specified in the Financing Agreement.
Mr. Doto James said, “The support will play an important role in complementing
domestic resources for financing priority expenditures under the 5-Year Development
Project Phase II.
The Government greatly values and appreciates European
Union’s commitment to Budget Support and would like to encourage other
Development Partners to re-consider use of the instrument in channeling their
financial support.
I re-affirm the 5th Phase Government’s steady commitment to
sound and prudent economic and public financial management and accountability”.
H.E. van de Geer explained, “The Second Five Year Development Plan is intended
to make Tanzania less of an agriculture-based economy and more of an
industry-based economy.
This requires substantial amounts of money and these
financial resources will need to come from domestic taxes, financial markets,
the private sector and development partners.
The contract that will be signed
here today, will help the Ministry of Finance and Planning to do exactly that;
it will help the Ministry to achieve enhanced revenue mobilisation, improved
accountability and greater efficiency in public expenditure.
” “We are fully
aware of the considerable political and economic challenges that remain at
present in Tanzania, and are committed to supporting the Government in facing
them.
It is felt that this Sector Reform Contract is best suited to assist
Government in improving its economic and fiscal governance, and therefore
achieve the progress it has set out for itself in the second Five Year
Development Plan,” van de Geer concluded.
In November 2016, the EU announced it
commitment to stronger relations with Tanzania and that there is room for increased
European investments to the country, if a number of obstacles to doing business
are efficiently tackled by the Government of Tanzania.
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