EU-Tanzania Partnership

Tanzanian Minister for Industry and Trade Abdallah Kigoda with then EU Commissioner for Development Andris Piebalgs at the signing of the first national indicative programs under the 11th European Development Fund for 2014-2020. Photo by: European Commission Despite posting 6 percent annual average economic growth, Tanzania remains one of the poorest countries in the world, with an estimated 12 million people living below the poverty line. Low human development ranking — 159th out of 187 — and off track Millennium Development Goals are major concerns as well. Development is hampered further by an unfavorable investment climate, weak economic governance, poor economic infrastructure, low productivity and a limited skills base. To address these issues, the Tanzanian government launched the Big Results Now initiative in 2013, which was adopted from the Malaysian model of development and focuses on six priority areas: energy and natural gas, agriculture, water, education, transport and resource mobilization. The government also formulated two five year-development plans that aim to nurture an industrial economy and competitiveness-led export growth. The European Union formulated its 2014-2020 national indicative program for Tanzania in line with the BRN initiative, national development plans and EU Agenda for Change with an overall objective to promote pro-poor, inclusive and sustainable growth. Funding levels Under its 2014-2020 national indicative program, the European Union allocated 626 million euros ($778.3 million) to Tanzania — the largest among the 16 African, Caribbean and Pacific countries that have signed NIPs with the EU. The seven-year assistance will be financed through the 11th European Development Fund. Tanzania may also benefit from European Investment Bank financing via the Cotonou Investment Facility. Funding priorities Under the 2014-2020 NIP, the EU will focus on three sectors: 1. Good Governance and Development: Under this sector, the EU aims to support the Tanzanian government’s poverty reduction strategies and programs. Efforts will focus on guiding the country’s transformation process, domestic revenue mobilization, budget transparency and reinforcement of domestic accountability. The 291 million euro allocation under this sector will be broken up into general budget support (270 million euros), public finance management (7 million euros), democratic governance and accountability (5 million euros), monitoring of results (6 million euros) and support for the GBS secretariat (3 million euros). 2. Energy: The overarching goal for this sector is to enhance the contribution of the energy sector toward sustainable economic growth. EU programs will be targeted to increase Tanzania’s energy access and security, support reforms in the energy sector, promote rural electrification, and increase the capacity and systems in the oil and gas sector. At the same time, the EU will prioritize scaling up Zanzibar’s renewable generation capacity. The 180 million euro allocation for the energy sector will be channeled to sector reform contract, including accompanying measures (90 million euros) and infrastructure and capacity development (90 million euros). 3. Sustainable Agriculture: EU support for this sector follows the Agricultural Sector Development Strategy and priorities set out by the government of Tanzania. Its specific objectives are to generate agriculture wealth, improve food nutrition and security, and improve management of natural resources and ecosystem. The EU will spend 140 million euros on this sector, specifically to link farmers to markets and value chains (90 million euros), improve access and availability of food (12 million euros) and develop sustainable agriculture and climate change adaptation methods (38 million euros). Apart from the three priority sectors, the EU will provide 3 million euros to promote the private sector, employment and economic development. This allocation is intended to provide financial support to civil society organizations involved in promoting business and employment. Below is a breakdown of EU allocations per sector for 2014-2020. Devex analysis The European Union has traditionally been among the top donors to Tanzania, alongside the World Bank, African Development Bank, United Kingdom and United States. Steady increases in its multiannual allocations for the East African country underscore the 28-member bloc’s commitment to address Tanzania’s development challenges. Apart from donor-recipient relations, the EU is seeking a broader relationship with Tanzania to include investment and trade, and common interests in global and regional issues. It will also engage with the private sector in areas of trade, investment and cooperation. Meanwhile, the EU will continue to work closely with the government of Tanzania to reduce the risks of insecurity and instability due to the incoming elections and other political issues that might affect the implementation of development programs and projects in the country. The EU will also support efforts to tackle corruption and promote more accountability and transparency within the government. While there is no sufficient government-led coordination and dialogue among the donors yet, the EU and its member states have augmented their efforts in joint programming, which currently focuses on analysis and coordination in the three priority sectors under NIP. Contact Delegation of European Union to the United Republic of Tanzania Tel: (255-22) 211-7473/6 Fax: (255-22) 211-3277 Email: