The African Development Bank (AfDB) has approved a $1.1 billion loan package to Tanzania which will be paid out over five years. The loan is aimed at supporting Tanzania’s economic transformation to inclusive and green growth, the lender says.
The AfDB said the loans would support “transport and energy to promote domestic and regional transport connectivity and improve access to reliable, affordable and sustainable electricity”.
“The second pillar prioritises strengthening of financial management and improving the enabling environment for private sector investment and finance for sustainable job creation,” the statement released on Thursday added.
Tanzania had last year disclosed plans to use commercial loans to finance a $14.2 billion rail network building programme over the next five years, and also plans to build a new $10 billion port at Bagamoyo, expand existing airports and invest in new roads. The government notes that the renewal of the country’s rail network is crucial to meeting increasing demand for the transportation of cargo to neighbouring countries, as well as improving domestic supply network.
Tanzania’s economy has grown by more than 6 percent since 2001 but this has not translated to better lives for its citizens as poverty remains high. The AfDB Board members, therefore, underscored the need for Tanzanian authorities to ensure that the country’s high GDP growth delivers robust economic transformation, poverty reduction and improved livelihoods.
The Board said future assistance would address the most pressing constraints to economic transformation and improving public sector governance to ensure value for money in public spending.