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Tanzania Joint Staff Assessment of the Poverty Reduction Strategy Paper Progress Report

IMF Country Report No. 04/283, September 2004

Prepared by the Staffs of the IMF and IDA
Approved by Anupam Basu and Michael Hadjimichael (IMF) and Callisto Madavo and Gobind Nankani (IDA)

July 21, 2004

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  1. The government of Tanzania has prepared its third Poverty Reduction Strategy Progress Report, which outlines the progress made in implementing the poverty reduction strategy during fiscal year 2002/03 (July-June), and updates the Poverty Reduction Strategy Paper (PRSP) of October 2000, that was endorsed by the Boards of the IDA and the IMF on November 30 and December 1, 2000, respectively.

  2. Tanzania is currently embarked on a major update of its Poverty Reduction Strategy. Analytical work and consultations have started to prepare a second-generation PRSP, covering the period 2004/05-2008/09. As a consequence, and with the agreement of the staffs of the Bank and the Fund, this year’s Progress Report (PR) provides a fairly light update on progress. A more in-depth review of experience will emerge from the update process, as well as more specificity with respect to forward-looking policy plans, which are being re-assessed as part of the on-going update.

  3. In the view of the staffs the PR accurately reflects developments in the past year. Despite a drought, real economic growth is estimated to have been about 5 percent, sound macroeconomic management was maintained, and notable progress was made in the areas of education and financial sector reform, among others. The report also, however, illustrates a number of emerging weaknesses in the PRS process, and these point to areas for attention in the main update. Foremost among them are the need to link the technicallevel reviews with a more policy-based debate on sector strategies; strengthening the link between the PRS and budget processes; stronger quantitative monitoring, and a deeper understanding of the relationship between economic growth and poverty outcomes.

  4. The government has made substantial progress in many of the areas flagged in last year’s JSA. These included further articulation of environment and financial sector strategies, development of a national secondary education strategy, structural reforms related to private sector development and the public service, improving PRSP costing, and updating poverty monitoring indicators. Work on the linkages between macroeconomic developments and poverty is being pursued in more depth under the main PRSP update, as is a more intensive assessment of agricultural strategy.

  5. The PRSP process in Tanzania continues to be open and transparent. This Progress Report benefited from the deliberations of a Poverty Policy week held in October 2003 involving a wide range of stakeholders, and was reviewed at a stakeholders meeting in January, 2004 at which there was input from civil society and NGOs. The final version of the Progress Report has been posted on the national website, and is also in print for wider dissemination to the general public. A joint statement of support for the Progress Report is being issued by Tanzania’s development partners.

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