Announcement of World Bank Supports Local Government Development Program in Tanzania on November 30, 2004

Tanzania: World Bank Supports Local Government Development Program in Tanzania Media Contacts In Washington: Aby Toure (202) 473 8302 akonate@worldbank.org In Dar-es-Salaam: Rosalie Ferrao (255-22) 211 4575 rferrao@worldbank.org Washington, November 30, 2004 – The World Bank Board of Executive Directors today approved an International Development Association (IDA) credit* of US$52 million to support local government reform in Tanzania. The Local Government Support Program aims to strengthen fiscal decentralization, improve accountability in the use of local government resources, and improve management of intergovernmental transfers. It will also increase access to infrastructure and services in unplanned and under-served areas of Dar-es-Salaam, as well as improve revenue performance to assure that infrastructure is sustainably operated and maintained. “The project has two objectives: first, to support a new national system of “block grants” for local government infrastructure, and second, to upgrade physical and institutional infrastructure in Tanzania’s largest city, Dar es Salaam,” said Matthew Glasser, the World Bank Task Team Leader for the project. The first component of the program – Support for Local Government Capital Development Grant System – is designed to support a new Government of Tanzania system of capital grants and capacity building grants for local government authorities. These grants are an essential part of Tanzania’s evolving intergovernmental fiscal framework, which will provide predictable flows of investment capital to help local government authorities better meet their service delivery obligations. Many bilateral donors are also planning to support this new grant system, which provides incentives for local government authorities to work with their citizens to effectively plan and budget for local infrastructure, and to build their capacity to manage public finances with transparency and accountability. The second component –Dar-es-Salaam Upgrading and Institutional Strengthening—focuses on the country’s biggest city, Dar-es-Salaam. It will help upgrade infrastructure and services in unplanned settlements, and improve local revenue collection. The last component—Support to PO-RALG —will support the President’s Office-Regional Administration and Local Government in the implementation, monitoring, evaluation and audits of the project. * The credit is provided on standard International Development Association (IDA) terms, with a commitment fee of 0.35 percent, a service charge of 0.75 percent over a 40 year period of maturity which includes a 10-year grace period. For more information on the World Bank’s work in sub-Saharan Africa visit: http://www.worldbank.org/afr For more information on the World Bank’s work in Tanzania visit: www.worldbank.org/afr/tz For more information about this project visit: http://web.worldbank.org/external/default/main?pagePK=64027221&piPK=64027220&theSitePK=258799&menuPK=287369&Projectid=P070736