Norway will extend to Tanzania financial support to the tune of about 448bn/- under a development cooperation agreement signed in Dar es Salaam yesterday.
The assistance will be in the form of General Budget Support and will cover the 2007-2011 period, with the Norwegian government disbursing an annual 87bn/-.
The agreement, signed by Finance Minister Zakia Meghji and Norwegian Ambassador Jon Lomoy, takes over from the memorandum of understanding signed by the two governments in June 2002 which expired last December.
Under the previous MoU, which covered fiscal years 2002/2003 to 2006/07, official aid from the Norwegian Government to Tanzania rose from 30.8bn/- in 2002/03 to 91.1bn/- in 2006/07. The assistance came in annual 50.8bn/- disbursements.
Speaking at the signing ceremony, Meghji said the assistance represented firm commitment by the government and people of Norway to continue supporting Tanzania in implementing her national strategy for economic growth and reduction of poverty (Mkukuta).
She named strategic areas lying under the strategy and which would benefit from donors support as including education, infrastructure, water, agriculture and energy.
`Norway has been and continues to be among the champions of the General Budget Support modality of aid delivery, which is the Tanzanian government`s preferred mechanism because it minimises transaction costs and builds the country`s capacity through the use of Government structures and systems,` she explained, adding that the aid would also enhances accountability and good governance.
`This aid commitment extends beyond one year and is an important response to Tanzania`s appeal to her development partners to facilitate medium-term expenditure planning for better coherence and resources allocation in general,` observed Meghji further.
She said implementation of the MoU would be monitored by all signatories from the 19 development partners that form the Joint Assistance Strategy for Tanzania (JAST) monitoring working group. Norway is among the signatories.
Ambassador Lomoy said the MoU was thanks to the commitment the government of Tanzania had shown in improving basic social services delivery and the various strategies devised to speed up the country�s social and economic growth.
He noted that Tanzania was grappling with a number of challenges in her efforts to achieve the goals of its strategy for growth and poverty reduction.
Elaborating, the envoy said among the challenges were empowering and strengthening local governments and the legal system as well as fighting corruption in public offices.
`Norway is now moving from the approach of a donor to the perception of an investor. Not an investor in the literal sense but by anticipation that the assistance given will bear positive results that will boost the well-being of the Tanzanian people.`
The pact was signed only a week since Tanzania and her 19 major development partners concluded a comprehensive annual review of general budget support at a meeting in Dar es Salaam.
Donors used the occasion to appeal for more seriousness by the Government in responding to reservations on public expenditure, including allegations of dubious payments at the Bank of Tanzania`s foreign account.
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