Tanzania PRSC-4

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The Fourth Poverty Reduction Support Credit (PRSC-4) is the first in a series of five annual operations supporting the implementation of Tanzania's National Strategy for Growth and Reduction of Poverty (MKUKUTA). The strategy covers six focus areas, and its pillars include: growth and the reduction of income poverty, improvements of the quality of life and social well being, and, governance and accountability. This project will support the government pursue its policy objectives laid out in the MKUKUTA, through financing for the execution of the government's FY07 budget. It would also provide the incentives to implement key economic, social and institutional reforms to strengthen the overall performance of the economy and contribute to poverty alleviation. Over the period 2005-2010, it is expected that the reform program under the series of five annual PRSCs will help sustain growth of around 6-8 percent annually, projected to result in a significant reduction in poverty. It would also help the government in making progress toward reaching the Millennium Development Goals (MDGs), namely, increase school enrollment and literacy rates, reduce child and maternal mortality, increase access to safe water, and strengthen the sustainability of development efforts. There are however several risks, among which the Country Financial Accountability Assessment (CFAA) and the Country Procurement Assessment Report (CPAR) identified significant fiduciary risk, but recent assessments such as the joint HPC Assessment and Action Plan show significant improvements in this area in recent years, and put Tanzania among the best performers in Africa. Additionally, capacity for program implementation and service delivery at both the central and district level is weak, but programs are in place for key areas to strengthen capacity.