The Chanzo is hosting Digital Freedom and Innovation Day on April 20, 2024. Register Here

Close this search box.

World Bank Issues Tanzania With Sh127.7 Billion Loan to Improve Revenue Management

Reforms will involve strengthening institutional capacity, efficiency, transparency, and accountability to improve service delivery for Tanzanian citizens.

subscribe to our newsletter!

Dar es Salaam. The World Bank has approved new funding to help Tanzania strengthen its revenue management, modernise public procurement processes, and improve resource allocation and audit effectiveness.

A statement released on Friday said that the new US$50 million, or Sh127.7 billion, Public Finance Management and Procurement Systems for Service Delivery will strengthen the capacity of the Mainland and Zanzibar to mobilise and manage public resources at the national level. 

It will involve strengthening institutional capacity, efficiency, transparency, and accountability. Ultimately, this will improve service delivery for Tanzanian citizens.

The operation is designed as a program for results (PforR), which links disbursements directly to achieving specific program results (‘result areas’) or outcomes. The program is structured around four key results areas.

The first area will support the government’s revenue mobilisation agenda, including enhancing the e-filing system and launching taxpayer awareness campaigns. 

READ MORE: World Bank Warns of High Population Growth, Urges Multisectoral Approach

The second result area will focus on increasing the efficiency and transparency of public procurement management, including specific activities to enhance the development of electronic government procurement system capacity and implement sustainable procurement practices. 

The third result area will support efforts to improve financial management through better budgeting processes (including a citizens’ budget in Swahili) and financial reporting. 

The fourth result area will enhance accountability by supporting activities that strengthen external audit and parliamentary oversight.

“It is commendable that the government acknowledges the vital role of robust public financial management and procurement systems in driving Tanzania’s development agenda, and that is why they initiated this program,” said Nathan Belete, World Bank Country Director. 

“While there has been important progress in this area over the past few years, it is important to continue to assess and address persisting weaknesses to enhance the timely delivery of public services and development operations for the benefit of citizens,” he added.

READ MORE: World Bank Abdicates its Responsibility to Human Rights in Tanzania

The World Bank said that recent public finance management reforms in Tanzania have led to significant achievements in the sector, mentioning the rollout of electronic revenue collection systems as among “the most notable” reforms, contributing to a 350 per cent increase in non-tax revenue collection over the past five years. 

Other important reforms the World Bank commended include adopting a treasury single account, implementing expenditure management systems, introducing electronic procurement systems, developing and implementing the central budget management information system, and strengthening parliamentary oversight functions. 

Despite these gains, the World Bank believes there are continuing weaknesses in core aspects of public finance management, such as the lack of a reliable, credible annual budget, a weak control framework, inefficiencies in revenue collection and taxpayer compliance, and shortcomings in public institutions’ financial reporting.

Paul Welton, World Bank Senior Financial Management Specialist and co-Task Team Leader, also mentioned delays in procurement, which he said create significant hindrances in the timely delivery of public services and the implementation of development operations in Tanzania.

“Considering that 70 per cent of the country’s annual budget, or [US]$13 billion, is spent through public procurement, any improvement in the public procurement system will result in great economic benefits to the country,” Mr Welton observed. “Ultimately, all citizens and businesses in Tanzania will benefit from improvements in transparency, accountability, and service delivery.”

Digital Freedom and Innovation Day
The Chanzo is hosting Digital Freedom and Innovation Day on Saturday April 20, 2024 at Makumbusho ya Taifa.

Register to secure your spot

Leave a Reply

Your email address will not be published. Required fields are marked *