Annex 2 - Denmarks Development Activities in Tanzania

General Budget Support

Danish direct support to Tanzania’s budget can be traced back to the very beginning of the partnership. However, General Budget Support in its current form began after Tanzania reached international debt release in 2001, where Denmark was among the first development partners to enter into a Poverty Reduction Budget Support (PRBS) programme. The most important objective of this direct budget support is to contribute to economic growth and reduction of poverty by supporting Tanzania’s own Poverty Reduction Strategy. Denmark has since 2011 provided approximately DKK 1.1 billion in general budget support to Tanzania. Another DKK 615 million is committed under the current fourth phase of the Danish GBS programme, which runs from 2011 to 2015. In the current phase, 80% of the Danish funds are given as a fixed annual tranche, while approximately 20% is dependent on fulfilment of performance agreements in selected areas.

The provision of GBS, together with increased tax revenues, has increased the state’s capacity to mobilize resources and increased public expenditures, enabling for significant growth in public services,, particularly in health and education. GBS has also created a structured framework for dialogue between development partners and the Government of Tanzania. In terms of poverty reduction, however, the progress has been disappointing, with a largely stable, high poverty level over the last decade. The great future challenges are to decrease the the transaction costs of aid and to focus the dialogue on the key problem areas, , such as poverty reduction.

Democracy, Human Rights and Good Governance

Danish support for Democracy, Human Rights and Good Governance can be traced back to the period prior to the abolition of the one-party system in 1992. The presidential election of 1995 was also supported by Denmark. Throughout the years, Denmark has supported democratic development in Tanzania by supporting key democratic institutions, civil society organisations and many of the important reforms in the public sector, such as the Public Service Reform, Local Government Reform, Public Financial Management Reform and Legal Sector Reform. The current phase, which runs from 2011 to 2015 with an amount of DKK 250 million, gives support to three components. 1) Support for democratic interaction and accountability through civil society organisations and empowerment of the media. 2) Support to the legal sector through increased access to legal service facilities and support to the Legal Sector Reform. 3) Support for the Public Financial Management Reform Programme to achieve more sound and more sustainable financial management structures, especially a more sustainable system of tax management.

Health

The objective of Denmark’s support to the health sector is to improve the general health status and well-being of all Tanzanians, with a special emphasis on women, children and vulnerable groups. The programme is aligned with Tanzania’s national poverty reduction and sector strategies as well as the Millennium Development Goals. Since the Government of Tanzania initiated the health reform in 1996, the Danish support has been in the form of sector programme support. The current fourth phase of the Health Sector Programme Support (HSPS IV) runs from 2009 to 2014. The programme supports three different components, the health sector on the Mainland, the health sector in Zanzibar and a multi-sectoral support to HIV/AIDS. The current fourth phase has a total budget of DKK 910 million, where Mainland is the largest component, receiving DKK 528 million (80% of which is co-financing through a Health Basket Fund). The many years of involvement in the health sector both on the Mainland and in Zanzibar, have generated positive results in form of reduced child mortality, reduced level of infectious diseases and better planning and collaboration around the support to basic health services. Challenges persist in ensuring human resources to health care facilities especially in rural areas, better quality of service delivery and more equity in access.

Road sector

Since the late 1980s, Denmark has supported the road sector with more than DKK 1.9 billion, and helped in the construction of some of Tanzania’s most important roads. A review in 2000 revealed a need for socio-economic initiatives, and it is a priority to make space for trade and pedestrians. At the same time, emphasis will be placed on road safety measures. Roads and transport have a high priority in the government’s plans for poverty reduction, and a well-functioning road network is considered a precondition for the economic growth and social development in Tanzania. The Danish support for this sector is to be phased out by 2014.

Agriculture

Through the years 1999 to 2008, Denmark contributed approximately DKK 454 million to Agriculture Sector Programme Support. The overall aim was a sustained increased rate of growth in the income of the rural population. To achieve this, the second phase of assistance (ASPS II) was given as support for policy reforms, promotion of private sector growth within the agricultural sector (PASS), farmers’ access to quality seeds, and increased agricultural development at local level. As time passed, however, the various components were increasingly implemented as fragmented, individual projects, lacking a coherent and strategic approach. The intended developing synergies between components were lost. Thus, the programme underachieved in terms of having an impact on national policy development, and the Danish support was phased out in 2008. Some of the more successful elements, such as the PASS support, after a restructuring, were included in the Business Sector Programme.

Business Sector

Denmark has been supporting Tanzania’s business and private sector development since the early 1990s. The main purpose of the Danish support has been to develop the private sector as an engine of pro-poor economic growth that supports Tanzania’s Poverty Reduction Strategy. Currently, the third phase of the Business Sector Programme Support (BSPS) focuses on: improved business environment, better access to international markets and the development of the micro, small and medium enterprises sector, including agriculture. The third phase is coming to an end (2008 – 2013), and the formulation of the fourth phase is at the final stage. The total financial support for the first three phases amounts to DKK 925 million, and the fourth phase will have a budget of DKK 600 million. The first three phases of BSPS have generated significant results and have played a key role in, for example, the establishment of the Vocational Education and Training Authority, improved functioning of the labour market, strengthened the capacity of the Ministry of Industry and Trade and improved access to financial services for more than one million people. The support to broad-based business environment reforms has been less successful, and the general pace of reform remains slow and will continue to be a challenge in the future.

The development activities in Tanzania’s business sector also include the Danida Business Partnership (DBP) Programme and support to the East African Community (EAC). Support to the EAC aims to increase regional economic integration and to create larger markets, increase competitiveness on the global market and attract foreign investors. The current Danish support amounts to DKK 160 million over the years 2012-2014.

Environment

For more than 20 years, Denmark has supported the environment in Tanzania. In the 1990s, the support was primarily for projects in the southern highlands, and in the end of the 1990s, the first Environmental Support Programme (ESP) was developed, and since 2000 it is this programme that has guided the Danish support. The current Danish support is focused on two issues 1) Urban Environmental Management with the aim of introducing environmental planning and management at the municipal level. 2) Natural Resource Management to support forests and wetlands. The programme support from 2007 to 2012 has had an overall budget of DKK 180 million. Most recently, Denmark has supported the development of Tanzania’s first National Climate Change Strategy. The Danish support to the environmental sector will be phased out gradually until the end of 2015.

Culture

From 2008 to 2012, Denmark supported the protection, promotion and development of Tanzania’s cultural identity and diversity with DKK 6.2 million. In working with school children and upcoming artists, the support helped to empower vulnerable groups through their active participation in arts and culture. A new phase is expected.

Gender

Denmark has supported the empowerment of Tanzanian women since 2002. The aim has been advocacy activity and enhancing of women’s rights to, for example, school and land. In the phase from 2009 to 2011, one of the main results was the completion of the National Gender Diagnostic Study. The current phase (2012-2014) of DKK 25 million, aims to prevent and fight gender-based violence and to empower women economically, especially women in the rural areas, through network and enhanced business skills.