Introduction

The government of Tanzania has ever since independence struggled to improve the lives of its people. However, its efforts have been in vain mainly because of diversity and lack of commitment on the existence of strategies at national and international level.

Tanzania has adopted different policies such as the Tanzania Development Vision 2025 for Mainland, Vision 2020 for Zanzibar, as well as the United Nations Millennium Development of 2002 at national and international level, in its endeavor to reduce poverty.

To implement the above, the socio-economic strategy mainstreamed MDGS and other government priorities for poverty reduction. These are National and Zanzibar Strategy for Growth and Reduction of Poverty (NSGRP).

This article focuses on economic growth on whether MDGs goals can be achieved by 2015 as to commitments by development partners and the developing countries -Tanzania in particular.

Tanzania Economic Growth

For the past five years of NSGRP implementation, Tanzania has increased its economic growth of an average 7% GDP from 1998 to 2009 and poverty has also dropped in relative terms . Tanzania ranks at 151 out of 182 countries in the world with a GDP per capita (at purchasing power parity) of around USD 1,150, but only USD 430 in nominal terms . Majority of the population survives on less than USD 1 a day. According to UNDP Human Development Index (HDI) of 2009 Tanzania’s HDI, between 1990 and 2007/9 rose by only 1.15 annually that is 0.436 to 0.530 in 2009 and the life expectancy of Tanzanians is 55 years. This information concludes that Tanzania’s economy is growing at a snail’s pace due to the poor policy in agriculture hampering export production. For instance, the agricultural sector employs 75% of the Tanzanian population in Tanzania and contributes approximately 24% of Tanzania’s GDP .

Currently the government has adopted an agricultural revolution policy of Kilimo Kwanza (literally ‘agriculture first’) which advocates for use of modern means of agriculture. However, Tanzania irrigates only 1 percent of 29 million hectors which can be irrigated despite its efforts which commenced all way back in 1967. The second problem is limited budget by the government which despite the good policy of Kilimo Kwanza, has remained at 6.5 percent of the total budget of 9.5 trillion of Tanzania Shillings for year 2009/10

The actual growth rate of around 7% is higher than the rate of growth of labour and capital inputs (both below 2%) ever since 2000, a positive sign that reflects a more efficient use of these resources owing to reforms and technology.

Source: Economic Survey 2008 (Ministry of Finance and Economic Affairs (MoFEA, 2009a)

The Tanzania’s macro-economic policy attained steady growth and relative macroeconomic stability. The fiscal balance is well within the acceptable limits although this performance is very dependent on donor aid.

The public debt stands at around 25% of GDP and is considered sustainable after the debt write-offs in 2000 under the programme of Highly Indebted Poor Countries Initiative.

Also budget allocation for recurrent and development expenditure has been a problem. For the Financial Year of 2009 the government planned to spend 9.5 trillion for recurrent expenditure, 6.7 trillion and 2. 8 trillion for development expenditure . Out of this development expenditure the government supports 0.9 trillion which approximately 32 % and 1.9 is left for development partner (donors). Thus 78% percent of Tanzania’s economic development rest to donors.

SAHRiNGON recommends the government of Tanzania to minimize recurrent expenditure in order to have reliable economic base for economic growth.

Inflation rate

The inflation rate increased fast to 12.2 percent as the prices of imported goods increased due to the fall of the external value of the shilling rate in 2008 as in December 2009. The inflation rate for 2009 is expected to remain well below 10%, although this is higher than the target of 7% in line with the decrease in food prices.

According to the IMF, the central bank is moderately independent and has contained inflation as its prime target. However, the effects of interest rate hikes on the volume of credit to private sector in particular are seriously taken into account. Private sector credit started from a very low base at 9% of GDP in 2003 but increased fast to almost 20% in 2008.

Thus from the above information the overall Tanzanian economy is uncertain as its debts are too big for the economy to grow.

External position

Tanzania still suffers a debt of USD 5.5bn despite its commitment to the Paris Declaration (PD) and is increasing again by about USD 500m per year after external debt cancellation (HIPC) in 2000. The debts are owed to multilaterals and donor countries which are policy-conditional. The ability to pay the debts is negligible where actual annual repayments are only 1 % to 2 % of all long term debt, although there are substantial but decreasing principal and interest arrears amounting to over USD 1.2bn with non-Paris Club countries like China and Arab states. The problem of inability to pay has rendered for development ineffectiveness.

The Paris Declaration realizes that increasing aid effectiveness requires a global commitment to increase aid on the part of donor countries. It urges a common search for more efficient ways of transmitting aid to achieve desired development results and goals. These goals are expressed in the Millennium Development Goals (MDGs) with the goal being to address the various dimensions of poverty.

Tanzania has often been commended for its progress in improving aid management and partnership1 in keeping with the PD and in advancing further the aid effectiveness agenda.

Nevertheless she has many features of a typically aid dependent country and receives aid under three typical modalities: General Budget Support (GBS), as well as basket and project funds. GBS has emerged as the preferred modality by Tanzania in light of criticisms that have been leveled at the two modalities.

All in all the interest in GBS is not new but rather the broad international consensus-embodied in PD- on what needs to done to produce the results wanted and where progress must be made to strengthen aid effectiveness.

Official Development Aid (ODA)

The budget for Fiscal Year 2008/2009 reveals that Tanzania depends on foreign aid approximately 35% to run the government. In fiscal Year 2007/2008 ODA supported Tanzania with a total of USD 2 billion. This money includes grants, debt relief and loans. 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.

Tanzania receives this assistance through three ways: General Budget Support (GBS), Basket Funds (BFs) and direct project funds, with the GBS being the most preferred mode due to its consistency with the government’s legal framework and processes.

Total Overseas Development Assistance by Aid Modality for FY 2002/03-2007/08 (USD)

Source: Government Budget Books, various years, Ministry of Finance (extracted from the GBS Annual Review 2007 – Information Pack, page 2).

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

Generally, the GBS system is good but has problems of macroeconomic mismanagement. However, the government has broken new grounds partly because of donor behavior. This problem needs to be rectified by mutual agreements between the two.

A recent report from the United Republic of Tanzania’s Ministry of Finance and Economic Affairs indicated that the GBS and basket funding continue to perform well whilst project funds still pose challenges . These include; lack of disclosure of MDAs (Ministry, Department, Agency) to account for the expenditures of direct project funds disbursed by DPs, funding delays and irregularities – in particular, project funds whose disbursements depend on implementation progress, various prior actions, DPs procedural requirements and in-year performance assessments.

With this problem, SAHRiNGON Tanzania Chapter is of the opinion that donors should find ways to account for and to present its achievements on funds provided as GBS due to the public awareness on success and failures of being at the infancy stage.

As on predictability, the PD requires that aid must be conventional in order to be effective as agreed in the 2008 Accra High Level Forum, among other things for donors to provide full and timely information on annual commitments and actual disbursements in a way that developing countries will be in a position to accurately record all aid flows in their budget estimates as well as their accounting systems.

Also there are no sanctions to donors when they fail to honor their promises of supporting developing countries. This situation seriously undermines the notion of mutual accountability as PD renders necessary. This suggests that there is a need to build the recipient’s system for intermediate actions or sanctions which are not disruptive in terms of stability and predictability of aid resources.

SAHRiNGON Tanzania Chapter recommends that GBS be provided by bilateral donors for more predictability than other aid instruments because it is easier to hold up disbursements in the face of changing political circumstances. For example, the UK withheld £10 million from its FY02 disbursement when it was disclosed that the Tanzanian Government intended to purchase a $40 million air traffic control system designed for military use.

The forth problem is the decrease of external aid. Tanzania expects to receive aid as shown in the table below in order to achieve the MDGs goal Additional Financing Needed from External Sources: 2008 – 2010 (in USD Million)

Source: Gleneagles Scenario template; extracted from Millennium Development Goals Report – Mid way Evaluation Report 2000-2008.

However, donor –imposed aid condition affects achievement of MDGs as aid conditions are the basic tools which the IMF and World bank uses to control chances and assessment of compliance to their policy prescription. On the other hand, bilateral donors provide MDGs aid resource with conditioned budget for implementation of MDGs goals through sector wide programmes. See the trend of Tanzania MDGs implementation in the table below.

Source: Extracted from Tanzania Mid-way Assessment at Glance of the MDGs Report 2009, for Tanzania Mainland at page iii.

The Role of Civil Society Organizations (CSOs)

The role of civil societies in Tanzania in ODA is traditional ones as they stimulate discussion on the efficacy of aid. Moreover, they play a key role to advocate for human rights and the right to development while at the same time acting as a source of public policy alternatives.

Alternatively, CSOs act as influencer to the international aid architecture as aid donors, recipients and partners with the goal being to improve, add, correct or change policy issues by holding policymakers accountable while at the same time evaluating and improving their own activities. Furthermore, CSOs play a role of informers and present views of others, share expertise and experience; putting forward new approaches and generating support for an issue or action by raising new ideas or question old ones while at the same time creating new ways of framing an issue.

NGOs in Tanzania also play a great role in strengthening the capacity of civil societies through informing and educating the public on various issues, for example: by helping to standardize the government policies and to question what GBS funds buy and where they are ultimately spent.

Apart from NGOs, the Media has also been stronger on drawing attention to specific abuses of public funds though they have been largely unable to relate these to the complexities of institutional relations, policy processes and debates. Newspapers (which provide greater depth) have limited circulation, while radio stations (typically subjected to greater state control than the print media) provide more limited opportunities for detailed debates about aid performance and its impact at the country level.

However, CSOs are no clear mentioned in national polices for the implementation of MDGs in Tanzania. This affect the ownership of MDGs by CSOs the implementation of the MDGs. SAHRiNGON Tanzania recommends streamlining CSOs in MDGs policy and strategies for achieved targets.

Gender Equality in Tanzania

Gender equality and women empowerment has been an agenda on all levels of the community ever since Tanzania made a commitment to implement the MDGs 2000-2010.

The implementation of MDGs made positive impacts to a number of policies, strategies and laws which previously, were not aligned with the principles of gender equality. Notable achievements include enactment of Land Laws which recognize equal rights between men and women, labour laws which prohibit discrimination against women in working places, criminalization of FGM and increased number of women in politics and decision making.

Despite everything, they are some factors which affect absolute realization of women rights in Tanzania as portrayed by the eighth millennium goal. The government still maintains discriminatory laws against women. These laws include Customary Law Declaration Order of 1963 which among other things prohibits widows to inherit land from her deceased husband and the law of marriage which allows marriage for a young girl under 15 years old.

Gender based violence is another problem for gender equality. Article 1 of the UN Declaration on the elimination of Violence against women of 1993 defines violence against women to mean:

‘any act of gender-based violence that results in, or is likely to result in, physical, sexual, or psychological harm or suffering to women, including threats of such acts, coercion, or arbitrary deprivation of liberty, whether occurring in public or in private life’

The Declaration further compels state parties to condemn any form of violence against women and should do away with any customs, tradition and religious beliefs to prohibit GBV. However, Section 16 of the Law of Marriage (supra) provides that ‘for the avoidance of doubt it is hereby declared that notwithstanding any customs to the contrary no person has any right to inflict corporal punishment on his or her spouse.

This provision of the law is narrow as it is only limited to corporal punishment. SAHRiNGON suggests amendment of this section to include all kind of violence. Apart from legal framework GBV occurs on criminal justice , women have been vulnerable to domestic violence due to lack of access to education and employment, rendering them to economic dependency.

Conclusion

Some development partners do not honor their commitments to support 0.7% of their GNI to the developing countries to the programming processes. ODA disbursement is often late and does not go with Tanzania national budget process. Besides, the Tanzanian’s debt is becoming higher despite the existence of HIPC initiative. All theses factors hinders steady economic growth.

The MDGs implementation requires more additional resources both internal and external in terms of finance. The country’s environment is conducive enough to reach MDGs targets as the micro economic indicators are positive and encouraging. However, the social indicators require more efforts.

CSOs activities towards achievement of MDGs goals are affected by funding from the government and donor community. The government does not have a policy law which guarantees funding to CSOs while as donor community fund small short term budgets.

1. NSGRP is a national strategy of Tanzanian government which intents for growth and poverty reduction; improve quality of life and social well being; and improved governance and accountability.
2. Leenderl Coljin, “Country Risk Research Tanzania Report”, Economic Resaearch Department, February　2009　Rabobank　Economic　Research　Department　Page:　5 http://overons.rabobank.com/content/images/Tanzania09_tcm64-82340.pdf (accessed 19th March 2009) and United Republic of Tanzania Poverty and Human Development Report shows 2009 states Tanzanian economy grew from 4.1 in 1998 to 7.4 in 2008, however, 2009 was expected fall to 5% due to global economic crisis.
3. UNDP Human Development Report of 2009 at pages 63, 64, 73 and 116.
4. UNDP Human Development Report of 2009 at page 5
5. 1 USD is equivalent 1350 Tanzania Shillings.
6. Speech by the Minister for Finance and Economic Affairs, Hon. Mustafa Haidi Mkulo (MP), Introducing to the National Assembly, the estimates of government revenue and expenditure for the financial year 2009/10Dodoma 11 June, 2009 page 73.
7. Source: Economic Survey 2008 (Ministry of Finance and Economic Affairs (MoFEA, 2009a)
8. Speech by the Minister for Finance and Economic Affairs, Hon. Mustafa Haidi Mkulo (MP), Introducing to the National Assembly, the estimates of government revenue and expenditure for the financial year 2009/10Dodoma 11 June, 2009 page 73 and 74.
9. National　Bureau　of　Statistics　and　Bank　of　Tanzania　Computations, http://www.bot-tz.org/Publications/inflationDevelopments.htm; accessed on 16th March 2010.
10. The Paris Declaration (PD) on aid effectiveness is part of a global commitment to reduce poverty and inequality, increase economic growth, develop capacity and achieve the MDGs. It provides an action oriented road map for reforming the delivery and management of aid, with the aim of making it more effective. PD is organised around five interconnected fundamental principles that are important for the effectiveness of not only GBS but all aid modalities on issues of: Ownership; this reflects the efforts made by partner countries to exercise effective leadership over their development policies and strategies, and to coordinate development activities. The Declaration commits partner countries to develop and implement their strategies through broad consultative processes, to operationalise these strategies and to take the lead in coordinating aid in dialogue with donors, while at the same time encouraging the participation of domestic non-state actors. PD calls upon donors to respect this leadership and strengthen the partner countries’ capacity to exercise it; Alignment: donors seek to ‘align’ their support with priorities and strategies set by partner countries, rather than imposing their own priorities (allocative alignment). This also means building up and relying on the partner countries’ own systems (systems alignment) for implementing projects, rather than putting parallel systems in place. For their own part, partner countries undertake to make a greater effort to adopt sound strategies and set sensible priorities, and to strengthen and improve operating mechanisms and procedures; Harmonisation: efforts by donors which aim at bringing the policies and procedures that govern their support as much into accord as possible, so as to avoid imposing varying and conflicting requirements on partner countries which reduce the effectiveness of the development cooperation efforts. The Declaration emphasizes the need for harmonizing, increasing transparency and improving collective effectiveness (through division of labour) of donor actions; Managing for development results (MfDR): donors and partner countries jointly undertake to try and manage and implement aid in a way that focuses on the desired results, and to improve evidence based decision-making. Both parties undertake to work together on a participatory basis to strengthen the capacity of developing countries and to instill the practice of results-based management; Mutual accountability: Both donors and partners agree to prioritise mutual accountability and transparency in the use of development resources. The Declaration States that this will also help to strengthen public support for national policies and development assistance. Mutual progress towards meeting the commitments on aid effectiveness made in the Declaration will be assessed by the DPs and the partner countries with the help of country-level mechanisms.
11. United Reublic of Tanzania, the Ministry of Finance and Economic Affairs Quarterly Public Debt Report, 1st quarter ending September 2009, page 2,
12. http://www.tzdpg.or.tz/external/dpg-tanzania/overview-of-aid-in-tanzania.html (accessed on 17th March 2010)
13. United Republic of Tanzania ( 2008b:14)
14. Darlene Mutalemwa, “The Third High Level Forum on Aid Effectiveness held in Accra, 2-4 September 2008 on mid-term review of the implementation of the Paris Declaration on Aid Effectiveness” http://www.undg.org/index.cfm?P=631 (accessed on 16th March 2010.)
15. Brian Frantz, “General Budget Support in Tanzania: A Snapshot of Its Effectiveness prepared to inform the development of USAID/Tanzania country’s strategic plan for the period 2005-2014”; page 16 http://www.sarpn.org.za/documents/d0001036/P1149-PNADA029_Tanzania_April2004.pdf (accessed 1st March 2010)
16. Cap. 114 and 115 of the Revised Edition 2002 of Laws of Tanzania.
17. Employment and Labour Relations Act, Act No. 6 of 2006.
18. Government Notice 276/1963.
19. Section 13 of Law of Marriage Act, Cap 29 of the Revised Edition 2002 of the Laws of Tanzania
20. ISS/AHSI (2009) Crime and the Criminal Justice System: Tanzania Country Review Report Enhancing the Delivery of Security in Africa. ISS South Africa. ( ISS and AHSI stands for Institute of Security Studies and African Human Security Initiative respectively.