Announcement of Tanzania East African Consultative Group Meeting on April 24, 1975

• 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 Bank News Release April 24, 1975 TANZANIA: EAST AFRICAN CONSULTATIVE GROUP MEETING The following announcement was made yesterday by the World Bank's European Office. "The eighth meeting of the East African Consultative Group and the third meeting of the group devoted exclusively to Tanzania took place in Paris on April 22 and 23, 1975, under the auspices of the World Bank. It was attended by representatives of Canada, Denmark, Finland, France, Germany, Japan, the Netherlands, Norway, Sweden, the United Kingdom and the United States. Also represented were the African Development Bank, the International Monetary Fund and the UNDP. The Development Assistance Connnittee of the OECD, • Italy, the Kuwait Fund, and Switzerland were present as observers. The Tanzanian delegation was led by the Hon. C.D. Msuya, Minister of Finance. Mr. Stanley Please, Country Program Director, Eastern Africa, was Chairman of the meeting for the World Bank. The meeting was conducted in a spirit of frankness and informality that members welcomed as providing an accurate insight into Tanzania's development progress and the critical problems currently facing the Tanzanian economy. The Tanzanian delegation told the meeting that the effects of worsening terms of trade threatened to nullify the economic advances made by Tanzania during its 14 years of independence. This situation was aggravated by the need for substantial and costly grain imports during 1974 and 1975 after poor and irregular rainfall. Ac~eptance of improved methods of cultivation by small farmers is somewhat slow. This would be a complex and major challenge to the country, but there were already signs that villagization and the decentralization of government were enabling extension services to reach increasing numbers of peasant farmers. • The Government emphasized that it recognized the fact that without these favorable effects on agricultural output its attempts to increase the provision of education and health services and water supplies in rural areas would be frustrated. /MORE  -2- A memorandum prepared for the meeting by the World Bank said that· the ~ Tanzanian Government had taken significant and courageous steps to meet its problems. Producer prices for major crops had been !ncreased·as an incentive to faI'filers, inputs for selected crops were being subsidjzed, and priority was being given to areas of high agricultural potential. Several donors, including the World Bank, were cooperating with Tanzania in new agricultural programs, including a major maize production program and projects in integrated rural development. The meeting also noted th~ Tanzanian Government's strategy for industrial development, especially as a means of processing local raw materials for supplying the mass domestic market and export markets. Representatives of a number of donor countries, while recognizing the gravity of Tanzania's position, which arose from factors largely beyond the Government's control, were encouraged by the Government's record of prudent financial management; its sustained connnitment to 1evelopment; and its determination to increase agricultural productivity while pursuing its long- term objectives of social and economic equality. The group recognized that if the Government's development program were to be m&intained even at its existing level, .there was an innnediate need for fast-disbursing concessional assistance and grants. In addition, there were advantages in having maximum flexibility in donors' aid programs. Some • donors indicated a willingness to contribute to Tanzania's innnediate need by using some of their intended project assistance for program aid. In conclusion, the Tanzani.an delegation expressed its appreciation of the complementary role of donors' assistance to Tanzania's national effort in planning the direction of its economy." -0- •