Tanzania - Second Poverty Reduction Support Credit Project

Page 1 27434 INITIAL PROJECT INFORMATION DOCUMENT (PID) Project Name: Tanzania Second Poverty Reduction Support Credit Region: Africa Sector: Multisectoral Project ID: P074073 Implementing Agency: Ministry of Finance Government of Tanzania Contact Person: Mr. Peniel Lyimo Permanent Secretary Ministry of Finance Date of PID: November 5, 2003 Projected Appraisal Date: March 2004 Projected Board Date: June 10, 2004 Country Background Tanzania is one of the poorest countries of the world. Per capita income is estimated at about $280 per year. Covering an area of 945,000 square kilometers, it has a population of about 33 million growing at about 2.4 percent a year. The economy is heavily dependent on agriculture (primarily, coffee, cotton, tea, cashew nuts, sisal, maize, rice, wheat, cassava, and tobacco), which accounts for about 50 percent of GDP, provides 85 percent of exports, and is by far the largest employer. Industry accounts for some 15 percent of GDP and is mainly limited to processing agricultural products and light consumer goods. The mining sector has good potential, but has yet to be fully developed. Tourism is one of Tanzania's dynamic sectors and has shown significant growth in recent years. The service sector and the informal sector are an increasingly important source of employment. Tanzania