Announcement of World Bank Approves United States (U.S.) One Hundred Fifty Million Dollars for Poor Communities in Tanzania on November 30, 2004

Tanzania: World Bank Approves $US150 Million for Poor Communities 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$129 million and a grant of US$21 million to improve social infrastructure and enhance access to essential public services by poor communities in Tanzania. The Second Social Action Fund will help empower individuals, households, and communities in the implementation of measures which can assist them in better managing risks associated with health, education, sanitation, water, transportation, energy and food insecurity. It will also provide support to the critically vulnerable through a variety of sustainable interventions. The project will contribute to the Government of Tanzania’s goal to build human capabilities through reducing vulnerability and managing livelihood risks. It will pay attention to improving social services and increasing empowerment and accountability in the areas of finance and governance. It also establishes clear links between community sub-projects being implemented and the Millennium Development Goals (MDGs), as indicated in the Tanzania Poverty Reduction Strategy. “The project provides a multi-sectoral response to the needs of communities notably by enabling them to take advantage of market-created opportunities as well as ensure the best use of resources made available to them by the government”, said Nginya Mungai Lenneiye, the World Bank Task Team Leader for the project. The National Village Fund component of the project will allow for communities to access resources that can stimulate economic activities and allow poor households to increase their incomes. It will help reduce vulnerability by empowering them with more instruments for insuring against the risks they face and improving the access to and use of social services. The Capacity Enhancement component will provide resources for community mobilization as well as the monitoring and evaluation of activities financed from the National Village Fund. Support will also be given to individuals interested in setting up voluntary savings groups. In Tanzania, the achievement of poverty reduction through the Public Expenditure Review, the Medium Term Expenditure Framework, and other tools has been hampered by the failure to adequately channel public resources to the poorest segments of the Tanzanian society, especially in the rural and peri- urban areas. Poor performance by the public sector, skewed growth in favor of urban areas, and limited opportunities to generate higher government revenues that could be used to target or fund poverty-reduction programs have been identified as some of the most significant obstacles to the achievement of better poverty reduction results. It is expected that the Second Social Action Fund will give the Government of Tanzania the necessary tools to facilitate the mainstreaming of the community driven development approach into transparent and measurable budget support. Public sector reform strategies will be supported in order to improve the efficiency of the public sector. This will be complemented by a national privatization program aimed at mobilizing the private sector for poverty reduction goals. * 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=P085786