DEBT RELIEF

The Guardian has reported that Tanzania is to receive over US$ 3 billion in debt relief after reaching ‘completion point’ under the enhanced framework of the ‘Highly Indebted Poor Countries Initiative’. The additional relief, which will be spread over a 20-year period, will be used to strengthen support for social sectors as envisaged under the Tanzania Poverty Reduction Strategy Paper (PRSP). According to the Economist Intelligence Unit, prior to the relief, Tanzania’s foreign debt stood at $6.6 billion and it was now expected to fall to $5.8 billion in 2002. The World Bank said that the government would reduce debt servicing by 47% which would enable it to allocate more funds to education, health, water, roads and poverty eradication.

Tanzania will become the fourth country after Uganda, Bolivia and Mozambique, to qualify for substantially increased assistance under the enhanced initiative following its successful implementation of all the stipulated requirements.

FREE PRIMARY EDUCATION
The government has confirmed the abolition of primary school fees and the World Bank has announced its approval of a US$ 150 million interest-free credit to expand school access and increase school retention at primary level (Thank you Roger Carter for sending this item -Editor).

The first results of these policies were announced by President Mkapa who said that Tanzania had enrolled over 1,100,000 pupils in standard one this year, a 41 % increase over the 779,000 pupils enrolled in the year 2000. Speaking at the Tanzania Consultative Group meeting in Dar es Salaam, Mkapa said that this success was due to timely financial support to Tanzania’s Education Sector Development Programme (ESDP) and the Primary School Development Programme.

THE WAR ON POVERTY AND ECONOMIC GROWTH
On efforts to wage war on poverty the President said that though considerable progress had been made in preparing and costing sector­specific interventions to alleviate poverty, international financing mechanisms had not changed to suit the progress made. “Existing international financing mechanisms are, it seems to us, still largely similar to those of the preceding years. There is a pressing need to review them, in order to ensure realistic, effective, and more flexible support for interventions aimed at reducing poverty” he said. More flexible and untied forms of international assistance were critical to Tanzania’s poverty reduction efforts at this stage, when it was becoming increasingly important to embark on more cost-effective and imaginative programmes to uplift the poor. On the country’s economic performance, the President said reforms so far undertaken had paid off as Tanzania had started to distinguish herself as a country with improved investment prospects. He said that investment, as a per cent of Gross Domestic Product (GDP) had started to increase and the overall rate of real GDP growth had accelerated to about 5% in 2000 with a projected 6% growth for the current calendar year. “Despite these welcome developments, the general economic performance still falls short of what is needed in order to meet our poverty reduction targets; we need to attain a much higher economic growth rate” observed President Mkapa. On poverty eradication efforts in hard hit rural areas the President said there must be new and deliberate efforts to help peasants increase crop production and sell at a profit.” No amount of investment and increased production in manufacturing, mining or tourism will be sufficient to sustainably lift an economy that depends on agriculture for 45% of its GDP, unless there is progress in agriculture,” he said.

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