(Politics): Tanzania Secures Sh455 Billion Budget Support from the European Union

The government, through the ministry of Finance and Planning, has signed three financial grant agreements valued at 179.35 million euros (nearly Sh455.09 billion) with the European Union to support budget operations.

The grant signing was witnessed by President Samia Suluhu Hassan yesterday, July 4, 2023, here in the city.

According to the President, this grant will significantly contribute to and accelerate the implementation of development programmes in the country.

“The money will be used to promote policy changes and industry growth in the blue economy, finance for growth, gender equity, green energy, and smart cities, as well as the renovation of rural roads in the southern highlands region,” she said.

President Hassan said this disbursement is partly the result of her visit to Brussels, Belgium, in February 2022, where she met and held talks with the President of the European Council, Mr Charles Michel, and the President of the European Commission, Ms Ursula von der Leyen.

“The disbursement made as a grant to the government coffers is fully aligned with the strategic Tanzania development plans particularly the five-year development plan III, the Tanzania development vision 2025, and the Zanzibar development vision 2050.”

“The programmes will also complement the theme of the 2023/2024 fiscal year as adopted by the East African Community (EAC), which says ‘accelerating economic recovery, climate change adaptation, and mitigation in enhancing productive sectors for improved livelihood’,” the President said.

The EU head of delegation to Tanzania, Mr Manfredo Fanti, said disbursement is part of the different EU grant budget support operations that we are putting together with the government of Tanzania from 2021 to 2027, which have a total budget of Sh637 billion.

“There are different ways to contribute to the sustainable development of Tanzania; some of them are very visible, but today we are here with different modalities we have agreed with the government of Tanzania, and as you said, it is a preferred modality by contributing to the national budget,” he said.

The EU envoy added, “We believe in this approach because of the ownership it creates in the partners’ country, however, it also has the downside that we lose the external visibility of our funding because we cannot show something that you can completely touch.”

The money, he said, is also expected to contribute to the implementation of the Global Gateway, the new European strategy to boost smart, clean, and secure links in the digital, energy, and transport sectors and to strengthen health, education, and research systems across the world.

Finance and Planning Minister Dr. Mwigulu Nchemba said the grant agreement is placed under three programmes, namely the blue economy, finance for growth and cooperation facility.

“This is going to support the budget together with the private sector reforms in gender, digitalization, green and smart cities, the blue economy, finance, and the improvement of rural roads,” he said.

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