Tanzania unlocked as loans, grants start to flow in again

Dar es Salaam. Tanzania secured about $3 billion in loans in the first nine months of President Samia Suluhu Hassan’s leadership, with commentators attributing this to improved relations with development partners.

The amount includes concessional loans and relief funds obtained from the World Bank (WB), the International Monetary Fund (IMF) and the African Development Bank (AfDB).

Economic experts and politicians are now waiting to see that the money is channelled to economic activities if it is to make meaningful impact on the economy which was affected by Covid-19.

The World Bank alone approved over $2.29 billion for different projects in the country. This includes $500 million Boost Primary Student Learning Program; $150 million Land Tenure Improvement Project (LTIP), and $500 million for the Tanzania Secondary Education Quality Improvement Project.

Other WB-funded projects (and the amounts shown in brackets) are the Zanzibar Energy Sector Transformation and Access Project ($117 million); Higher Education for Economic Transformation Project ($425 million); Boosting Inclusive Growth for Zanzibar ($150 million); Tanzania Roads to Inclusion and Socioeconomic Opportunities ($300 million), and the Digital Tanzania Project ($150 million).

Tanzania has also secured a total of $256 million from the AfDB, of which $140 million is to finance power generation and electricity connectivity, and the $116 million to upgrade the 160km Mnivata-Newala-Masasi road corridor in southern Tanzania.

After coming to power and changing the national strategy in fighting the viral Covid-19 pandemic, President Hassan convinced the IMF to approve $567 million in funds, of which $189 million is under the Rapid Credit Facility (RCF) scheme, and $378 million under the Rapid Financing Instrument (RFI).

Speaking to The Citizen on the matter, renown economists commended the increasing foreign funding, saying it shows support to the regime that is currently in power. But, they also called for effective monitoring to ensure that the funds achieve their intended purposes.

A Mzumbe University lecturer, Prof Honest Ngowi, said securing such huge sums in such a short period shows that the donor community has confidence in President Hassan’s administration.

Also, he said, the important thing is to ensure that the money is directly spent on development projects which will bring more benefits, not on recurrent expenditures.

“In order for the benefits to trickle down to individual economies, and make sense to the national economy, we should also promote the use of local contents in the projects - such as supply of local raw materials and labour, as well as promote the domestic private sector,” said Prof Ngowi.

A University of Dar es Salaam economist, Prof Humphrey Moshi, said that, with the adverse impact of the Covid-19 pandemic on the global economy, the funds have been procured at an ideal time-line to help the government fulfil its budgetary plans.

“The pandemic affected national and individual economies, which reduced government revenues. This adversely affected implementation of some of the country’s development plans, thus securing new funds would supplement the budget,” Prof Moshi said.

He also said that President Hassan’s efforts to secure the loans on concessional terms is to be applauded because it gives the country a relief in repayments.

“What we need now is action to prevent corruption and misuse of the funds, so that the projects can be fully implemented to complement the economy and reduce poverty levels,” he said.

For his part, the opposition party ACT-Wazalendo’s leader, Mr Zitto Kabwe, also commended that securing such a huge amount of money shows the change of perception on the country’s new Head of State to the donor community.

However, the country now needs a strong legislature to guide on effective use of the funds.

“As ACT-Wazalendo, we have decided to follow up on every funded project and unravel any embezzlement. In the coming special general meeting at the end of January 2022, we are going to launch a new strategy to oversee the government outside the parliament,” Mr Kabwe said.

Mostly, the politician said, the projects must bring in the expected value for money, and should be implemented with quality and effectiveness.