Sweden and Tanzania signs agreement about general budgetsupport for poverty reduction

Up to 1,8 billion Swedish kronor for four years

The Government of the United Republic of Tanzania and Sweden have today signed a Bilateral Financing Agreement under which Sweden will provide Swedish Kronor 1.8 billion, equivalent to Tanzania shillings 313 billion to the Government of Tanzania for General Budget Support (GBS) for fiscal years 2009/10 to 2012/13.

The Swedish GBS grant will not be tied to any sector or project and will be disbursed in four equal annual instalments of up to SEK 450 million (equivalent to Tshs. 78.3 billion). This support demonstrates Sweden’s continued commitment to support Tanzania’s development. The General Budget Support is expected to constitute around 55% of the Swedish aid portfolio to Tanzania, in addition to support to education, research, energy, governance, human rights and private sector development.

GBS continues to be Tanzania’s most preferred aid delivery modality as it contributes to reduction of transaction costs and builds Tanzania’s capacity to strengthen existing structures and systems for management of public resources. GBS is channelled through the Government budget without earmarking to particular sectors or activities. Hence GBS will strengthen Tanzania’s administrative systems and will enhance accountability, transparency and possibilities for public and parliamentary scrutiny on the use of public resources.

Tanzania has achieved important development gains over the years; however, some challenges remain, specifically on capacitating the Local Government Authorities and continued improvement of the public financial management which is crucial for the fight against corruption. The Government of Tanzania and its Development Partners especially the 14 GBS DPs who are signatory to the Partnership Framework Memorandum (PFM) is committed in implementing a Comprehensive Public Financial Management Reform Programme that seeks to address these weaknesses.

The Agreement was signed today at the Ministry of Finance and Economic Affairs, by Mr. Ramadhani M Khijjah, the Permanent Secretary, and H.E. Mr. Staffan Herrström, Ambassador of Sweden to Tanzania on behalf of their respective Governments.

Ministry of Finance and Economic Affairs

Embassy of Sweden

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