Sixth Poverty Reduction Support Credit (PRSC6)

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The Sixth Poverty Reduction Support Credit (PRSC-6) for Tanzania will be the third credit in a series of five annual operations and the mid-cycle operation supporting the implementation of Tanzania's National Strategy for Growth and Reduction of Poverty (known as MKUKUTA). Its strategic focus is on two key sets of objectives: sustaining high and shared economic growth, and expanding the effective delivery of basic services through the government budget. There are two closely interrelated and overlapping sets of risks for this operation. The first set includes general risks that may interfere with the successful implementation of the MKUKUTA, including the vulnerability of Tanzania's economy to external shocks, political risks related to the situation in Zanzibar, aid dependence, decentralization, and capacity constraints. The second set of risks could undermine the overall credibility of the general budget support (GBS) process - and PRSC - as an effective means to channel resources towards the achievement of the MKUKUTA objectives. The operation supports the significant progress that has been achieved by government in improving the institutional and financial set-up in the energy and transport sectors, and in the area of governance, through the enactment of a new anti-corruption and a new audit bill. The proposed credit, together with other partners' budget support contributions, sustains the government in funding its basic services and infrastructure development needs, while strengthening the country's own financial management and budgetary delivery systems.