Tuesday, March 13, 2007

Japan's aid commitment to Tanzania

Japan has committed to give Tanzania US$82m for general budget support and to finance the national strategy for economic growth and reduction of poverty, commonly known as Mkukuta.

Most of the money, US$60m, will be directed to the 240 km Arusha-Namanga and Namanga-Athi River road development projects. This is the road that goes from Arusha across the border to Kenya. A better road will support support regional integration, cross border trade, tourism, socio-economic development of the area and contribute to the reduction of poverty. As most visitors to the School of St Jude fly into Nairobi, this new road will make the trip from Nairobi to Arusha MUCH more comfortable!

The rest of the money will support the National Strategy for growth and Reduction of Poverty and US$5.5m will contribute to the pooled Fund for the Poverty Monitoring System. This system is used by all donors to ensure that aid funding is directed to projects that will contribute towards the Millennium Development Goals. Tanzania receives budget support from 14 donor countries. These funds account for 20% of the Tanzanian government budget so it is important for donors to see that the funds are directed to help lift the country out of extreme poverty.

Another sign that the Tanzanian economic system is improving is the decision by the Japanese Development Bank to to re-introduce the Yen Loan Facility which has lain suspended for 25 years. Bank officials said:

The re-introduction of the facility is a reflection of the improvement in macroeconomic management in the country and strengthening its debt sustainability.

This news is another reflection that Tanzania is taking big steps towards better governance and effective economic management. Without better management, extreme poverty cannot be eradicated.

Lunch at the School of St Jude

Better economic management means that the kids who are getting an excellent education at the School of St Jude will grow up with better prospects for meaningful work and livelihoods.

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