Tanzania’s Green PRSC

1. Tanzania’s Green PRSC Workshop on CEAs, SEAs and Development Policy Lending Tuesday, January 18, 2005 Robert Utz Senior Economist, Tanzania AFTP2

2. Overview • Background on Tanzania • Overview of the PRSC • Integration of Environmental Issues into the PRSC • Key Achievements

3. Tanzania • Population: 34 million • Per capita income: US$ 280 • Agriculture accounts for 50 percent of GDP and around 75 percent of employment • Mining and tourism are other important engines of growth

4. Tanzania • Donor assistance is 12 percent of GDP and donors finance almost 50 percent of the government budget • Large number of donor projects • Weak capacity in government • Strong track record of economic and structural reforms

5. Before the PRSC there were … • A PRSP and HIPC • Efforts to make the government donor relationship more effective • Donor harmonization through sector development programs and thematic multi-donor programs • A government owned, participatory PER process • Bank’s Programmatic Adjustment Credit • Coordinated budget support from bi-lateral donors and the EU

6. In 2003, the Bank joined the party… • PRSC was harmonized and integrated with the PRBS facility (14 donors involved) • Common policy matrix • Joint review process of progress • Draws largely on existing fora for government-donor dialogue

7. … and introduced some new rules • Prior Actions • Triggers • Safeguards

8. PRSC • PRSC-1 US$ 132 million (2003) • PRSC-2 US$ 150 million (2004) • PRSC-3 US$ 175 million (2005)

9. Common Performance Assessment Framework • Monitoring and evaluation systems • Private sector and rural development • Public sector management • Public expenditure and financial management • Environmental management • Monitoring of sectoral outputs/outcomes but no policy dialogue on “sectoral” issues

10. Achievements • More predictable budget support • Strong donor coordination • Greater government ownership • Reduction in transaction cost

11. Environmental Concerns In Tanzania • Tanzania’s economy is largely natural resource based – agriculture,tourism, mining, fisheries and forestry • Weak policy, regulatory and institutional framework for environmental assessments and to deal with environmental concerns of investment projects • Failure of traditional approaches to address institutional issues

12. Integrating Environment into the PRSC CAS foresaw budget support operation to support Tanzania’s efforts in combating poverty, spurring rural development, and promoting protection of the environment as basis for sustainable development.

13. Integrating Environment into the PRSC (cont’d) Once we embarked on PRSC… • Opposition by other donors to include new areas in the policy matrix • Uncertainty regarding environmental requirements for PRSCs • Difficulty to explain difference between prior actions and requirements to other donors … thus integrated environment explicitly in the PRSC

14. Objectives of Environmental Component of PRSC • Support in-country systems for environmental management • Mainstreaming environmental concerns into the PRSP, the budget, and sectoral policies • Improving understanding of poverty-environment linkages • Strengthening institutional capacity

15. Practical Implications • Resources are provided through the budget • Focus on budget allocations and PER work for environment • Focus on policy dialogue • Technical assistance through project support • Strong field presence is important

16. Key Achievements • Establishment of appropriate institutional arrangements • New environmental management act has been prepared and approved • SEA carried out • Country Director received green award in 2004

17. Thank you!