IMPLEMENTATION COMPLETION AND RESULTS REPORT SERIES OF CREDITS TOTALING IN THE AMOUNT OF SDR MILLION (US$ 1,025 MILLION EQUIVALENT) TO THE

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank Report No: ICR1717 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-41700,TF-90200, IDA-42940, IDA-4260, IDA-4630, IDA-46830, TF-94420,IDA-48130) SERIES OF CREDITS TOTALING IN THE AMOUNT OF SDR MILLION (US$ 1,02 MILLION EQUIVALENT) TO THE UNITED REPUBLIC OF TANZANIA FOR A THE SECOND SERIES OF POVERTY REDUCTION SUPPORT CREDITS (PRSCs 4 through 8) September 1, 2011 Poverty Reduction and Economic Management 2 Africa Region

2 TANZANIA - GOVERNMENT FISCAL YEAR July 1 June 30 CURRENCY EQUIVALENTS (Exchange Rate Effective as of September 1, 2011) Currency Unit Tanzania Shilling (T Sh) US$1.00 T Sh 1,619 Weights and Measures Metric System ABBREVIATIONS AND ACRONYMS ACGEN ADB AML APL AR ART ASDP ASDS ASLMs BARA BEST BG BoT BRELA CAG CAS CBG CCRO CDG CEM CFS CIDA CPIA CRW CSO CU DAWASCO D by D DC DFID DP DPG DSA EAC EIA EITI EMA Accountant General African Development Bank Anti Money Laundering Adaptable Programmatic Loan Annual Review Antiretroviral Therapy Agriculture Sector Development Program Agriculture Sector Development Strategy Agriculture Sector Lead Ministries Business Activities Registration Act Business Environment Strengthening in Tanzania Budget Guidelines Bank of Tanzania Business Registration and Licensing Authority Controller and Auditor General Country Assistance Strategy Capacity Building Grant Certificates of Customary Rights of Occupancy Council Development Grant Country Economic Memorandum Consolidated Funds Service Canadian International Development Agency Country Policy and Institutional Assessment Crisis Response Window Civil Society Organization Customs Union Dar es Salaam Water and Sewerage Cooperation Decentralization by Devolution District Council Department for International Development Development Partner Development Partners Group Debt Sustainability Analysis East African Community Environment Impact Assessment Extractive Industries Transparency Initiative Environmental Management Act

3 ESF ESW EU EWURA FDI FEWS FIAS FQ FY GBS GDP GNFS GNI GoT GWG HBS HIPC HIV/AIDS IAS ICR ICT IDA IEG IFMIS (IFMS) IMF IMR INTOSAI IPT ISA IT JAST JEBS JICA JPD JSC KFW LGAs LGRP LSMS LSRP MAIR M&E MC MDAs MDRI MEFMI MFI MEVT MLEYD MMMP MMS MoFEA MoJCA Exogenous Shock Facility Economic and Sector Work European Union Energy Water Utility and Regulatory Authority Foreign Direct Investment Food Early Warning System Foreign Investment Advisory Service Financial Quarter Fiscal Year General Budget Support Gross Domestic Product Good and Non-Factor Services Gross National Income Government of Tanzania Governance Working Group Household Budget Survey Heavily Indebted Poor Countries Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome International Accounting Standards Implementation Completion and Results Report Information and Communication Technologies International Development Association Independent Evaluation Group Integrated Financial Management Information System International Monetary Fund Infant Mortality Rate International Organization of Supreme Audit Intermittent Preventive Therapy International Standard on Auditing Information Technology Joint Assistance Strategy for Tanzania Joint Evaluation of Budget Support Japan International Cooperation Agency Joint Programming Document Joint Steering Committee Kreditanstalt fuer Wiederaufbau (KfW Development Bank) Local Government Authorities Local Government Reform Program Living Standards Measurement Study Legal Sector Reform Program MKUKUTA Annual Implementation Review Monitoring and Evaluation Municipal Council Ministry Departments and Agencies Multilateral Debt Relief Initiative Macro Economic Financial Management Institution Microfinance Institution Ministry of Education and Vocational Training Ministry of Labour, Employment and Youth Development MKUKUTA Monitoring Master Plan MKUKUTA Monitoring System Ministry of Finance and Economic Affairs Ministry of Constitutional Affairs and Justice

4 MoU MoID MNRT MTEF MTPP MYR NACSAP NAO NBS NDMC NDS NEMA NGOs NGSRP NMSF NRM NSPS OC OCGS PAF PCCA PCCB PE PE PEAP PEDP PEFAR PER PETS PFM PFM PFMRP PHDR PMO PMUs PO-PSM PMO-RALG PPP PPRA PRBS PRGF PRS PRSC PS PSI PSC PSD PSDS PSIA PSM PSPIP PSRC PSRP Memorandum of Understanding Ministry of Infrastructure Development Ministry of Natural Resources and Tourism Medium-Term Expenditure Framework Medium Term Pay Policy Mid-Year Review National Anti-Corruption Strategy and Action Plan National Audit Office National Bureau of Statistics National Debt Management Committee National Debt Strategy National Environmental Management Act Non-Governmental Organizations National Strategy for Growth and Reduction of Poverty National Multi-Sectoral Framework Natural Resource Management National Social Protection Strategy Other Charges (Non salary recurrent expenditure) Office of the Chief Government Secretary Performance Assessment Framework Prevention and Combating of Corruption Act Prevention and Combating of Corruption Bureau Public Enterprise Personal Emoluments Poverty Eradication Action Plan Primary Education Development Program Public Expenditure and Financial Accountability Review Public Expenditure Review Public Expenditure Tracking Survey Partnership Framework Memorandum Public Financial Management Public Financial Management Reform Program Poverty and Human Development Report Prime Minister s Office Procurement Management Units President s Office Public Service Management Prime Minister s Office Regional Administration and Local Government Public Private Partnership Public Procurement Regulatory Authority Poverty Reduction Budget Support Poverty Reduction and Growth Facility Poverty Reduction Strategy Poverty Reduction Support Credit Permanent Secretary Policy Support Instrument Public Service Commission Private Sector Development Private Sector Development Strategy Poverty and Social Impact Analysis Public Service Management Public Service Pay and Incentive Policy Parastatal Sector Reform Commission Public Service Reform Program

5 PwC QAG SA SASE SBAS SDS SEA SUMATRA SME SMP SWAp TANESCO TANROADS TB TG THIS TIB TSIP TMP ToR TPA TPA TRA TWG UK UNDP USD VAT VLC WGI PricewaterhouseCoopers Quality Assurance Group Safeguard Assessment Selected Accelerated Salary Enhancement Strategic Budget Allocation System Service Delivery Surveys Strategic Environment Assessment Surface and Maritime Regulatory Authority Small and Medium Enterprises Statistical Master Plan Sectorwide Approach Tanzania Electric Supply Company Ltd. Tanzania National Roads Agency Tuberculosis Thematic Group Tanzania HIV/AIDS Indicator Survey Tanzania Investment Bank Transport Sector Investment Plan Tax Modernization Program Terms of Reference Tanzania Ports Authority Temporary Process Action Tanzania Revenue Authority Technical Working Group United Kingdom United Nations Development Programme United States Dollars Added Tax Village Land Certificate Worldwide Governance Indicator Vice President: Acting Country Director: Sector Manager: Task Team Leaders: ICR Task Team Leader: ICR Primary Author: Obiageli Katryn Ezekwesili Mercy Miyang Tembon J. Humberto Lopez Robert Johann Utz, Paolo B. Zacchia Yutaka Yoshino Peter Miovic

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7 UNITED REPUBLIC OF TANZANIA POVERTY REDUCTION SUPPORT CREDITS (PRSCs 4 through 8) Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Program Performance in ISRs CONTENTS 1. Program Context, Development Objectives and Design Key Factors Affecting Implementation and Outcomes Assessment of Outcomes Assessment of Risk to Development Outcomes Assessment of Bank and Borrower Performance Lessons Learned on Issues Raised by Borrower/Implementing Agencies/Partners Annex 1. Bank Lending and Implementation Support/Supervision Processes Annex 2. Program Performance Annex 3. Tanzania PRSC 4-8 Series Reform Support Matrix (by PDO Areas for each PRSC) Annex 4. Tanzania PRSC 4-8 Series Results Framework and Results at the time of completion Annex. Beneficiary Survey Results... 1 Annex 6. Stakeholder Workshop Report and Results... 1 Annex 7. Summary of Borrower's ICR and/or on Draft ICR... 1 Annex 8. of Co-financiers and Other Partners/Stakeholders... 1 Annex 9. List of Supporting Documents... 2 MAP... 3 i

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9 Data Sheet A. Basic Information Program 1 Country Tanzania Program Name Tanzania PRSC-4 Program ID P0909 L/C/TF Number(s) IDA-41700,TF ICR Date 09/01/2011 ICR Type Core ICR Lending Instrument DPL Borrower UNITED REPUBLIC OF TANZANIA Original Total Commitment XDR M Disbursed Amount XDR M Implementing Agencies Ministry of Finance Cofinanciers and Other External Partners African Development Bank (AfDB) European Union (EU) Canada JAPAN Netherlands SWITZERLAND GERMANY IRELAND Norway Denmark Finland Sweden United Kingdom Department for International Development (DfID) Program 2 Country Tanzania Program Name Tanzania Fifth Poverty Reduction Support Credit Program ID P0967 L/C/TF Number(s) IDA ICR Date 09/01/2011 ICR Type Core ICR Lending Instrument DPL Borrower UNITED REPUBLIC OF TANZANIA Original Total Commitment XDR M Disbursed Amount XDR M ii

10 Implementing Agencies Ministry of Finance Cofinanciers and Other External Partners African Development Bank (AfDB) European Union (EU) Canada JAPAN Netherlands SWITZERLAND GERMANY IRELAND Norway Denmark Finland Sweden United Kingdom Department for International Development (DfID) Program 3 Country Tanzania Program Name Sixth Poverty Reduction Support Credit (PRSC6) Program ID P L/C/TF Number(s) IDA-4260 ICR Date 09/01/2011 ICR Type Core ICR Lending Instrument DPL Borrower UNITED REPUBLIC OF TANZANIA Original Total Commitment XDR M Disbursed Amount XDR M Implementing Agencies Ministry of Finance Cofinanciers and Other External Partners African Development Bank (AfDB) European Union (EU) Canada JAPAN Netherlands SWITZERLAND GERMANY IRELAND Norway Denmark Finland Sweden United Kingdom Department for International Development (DfID) iii

11 Program 4 Country Tanzania Program Name Tanzania Seventh Poverty Reduction Support Credit Program ID P L/C/TF Number(s) IDA-4630,IDA ,TF ICR Date 09/01/2011 ICR Type Core ICR Lending Instrument DPL Borrower UNITED REPUBLIC OF TANZANIA Original Total Commitment XDR M Disbursed Amount XDR M Implementing Agencies Ministry of Finance Cofinanciers and Other External Partners African Development Bank (AfDB) European Union (EU) Canada JAPAN Netherlands SWITZERLAND GERMANY IRELAND Norway Denmark Finland Sweden United Kingdom Department for International Development (DfID) Program Country Tanzania Program Name Tanzania Poverty Reduction Support Credit 8 Program ID P L/C/TF Number(s) IDA ICR Date 09/01/2011 ICR Type Core ICR Lending Instrument DPL Borrower Original Total Commitment UNITED REPUBLIC OF TANZANIA XDR 7.80M Disbursed Amount XDR 7.80M Implementing Agencies Ministry of Finance iv

12 Cofinanciers and Other External Partners African Development Bank (AfDB) European Union (EU) Canada JAPAN Netherlands SWITZERLAND GERMANY IRELAND Norway Denmark Finland Sweden United Kingdom Department for International Development (DfID) B. Key Dates Tanzania PRSC-4 - P0909 Process Date Process Original Date Revised / Actual Date(s) Concept Review: 12/12/200 Effectiveness: 07/18/2006 Appraisal: 03/14/2006 Restructuring(s): Approval: 0/09/2006 Mid-term Review: Closing: 06/30/ /30/2007 Tanzania Fifth Poverty Reduction Support Credit - P0967 Process Date Process Original Date Revised / Actual Date(s) Concept Review: 10/12/2006 Effectiveness: 08/27/ /27/2007 Appraisal: 02/06/2007 Restructuring(s): Approval: 04/24/2007 Mid-term Review: Closing: 06/30/ /30/2008 Sixth Poverty Reduction Support Credit (PRSC6) - P Concept Review: Process Date Process Original Date Revised / Actual Date(s) 10/2/2007 Effectiveness: 11/17/ /17/2008 v

13 Appraisal: 03/2/2008 Restructuring(s): Approval: 10/21/2008 Mid-term Review: Closing: 11/30/ /30/2009 Tanzania Seventh Poverty Reduction Support Credit - P Process Date Process Original Date Revised / Actual Date(s) Concept Review: 02/03/2009 Effectiveness: 08/20/ /20/2009 Appraisal: 04/20/2009 Restructuring(s): Approval: 06/09/2009 Mid-term Review: Closing: 11/30/ /30/2010 Tanzania Poverty Reduction Support Credit 8 - P Process Date Process Original Date Revised / Actual Date(s) Concept Review: 10/20/2009 Effectiveness: 11/19/ /19/2010 Appraisal: 03/09/2010 Restructuring(s): Approval: 09/28/2010 Mid-term Review: Closing: 08/31/ /31/2012 C. Ratings Summary C.1 Performance Rating by ICR Overall Program Rating Outcomes Risk to Development Outcome Bank Performance Borrower Performance Moderately Satisfactory Moderate Satisfactory Moderately Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Overall Program Rating Bank Ratings Borrower Ratings Quality at Entry Satisfactory Government: Moderately vi

14 Quality of Supervision: Overall Bank Performance Satisfactory Satisfactory Implementing Agency/Agencies: Overall Borrower Performance Unsatisfactory Moderately Satisfactory Moderately Satisfactory C.3 Quality at Entry and Implementation Performance Indicators Tanzania PRSC-4 - P0909 Implementation QAG Assessments Indicators Performance (if any) Potential Problem Quality at Entry Program at any time No None (QEA) (Yes/No): Problem Program at Quality of No any time (Yes/No): Supervision (QSA) None DO rating before Closing/Inactive status Satisfactory Rating: Tanzania Fifth Poverty Reduction Support Credit - P0967 Implementation QAG Assessments Indicators Rating: Performance (if any) Potential Problem Quality at Entry Program at any time No Highly Satisfactory (QEA) (Yes/No): Problem Program at Quality of No any time (Yes/No): Supervision (QSA) None DO rating before Closing/Inactive status Satisfactory Sixth Poverty Reduction Support Credit (PRSC6) - P Implementation QAG Assessments Indicators Performance (if any) Potential Problem Quality at Entry Program at any time No None (QEA) (Yes/No): Problem Program at Quality of No any time (Yes/No): Supervision (QSA) None DO rating before Closing/Inactive status Moderately Satisfactory Rating: vii

15 Tanzania Seventh Poverty Reduction Support Credit - P Implementation QAG Assessments Indicators Performance (if any) Potential Problem Quality at Entry Program at any time No None (QEA) (Yes/No): Problem Program at Quality of No any time (Yes/No): Supervision (QSA) None DO rating before Closing/Inactive status Moderately Satisfactory Tanzania Poverty Reduction Support Credit 8 - P Implementation QAG Assessments Indicators Performance (if any) Potential Problem Quality at Entry Program at any time No None (QEA) (Yes/No): Problem Program at Quality of No any time (Yes/No): Supervision (QSA) None DO rating before Closing/Inactive status Moderately Satisfactory Rating: Rating: D. Sector and Theme Codes Tanzania PRSC-4 - P0909 Original Actual Sector Code (as % of total Bank financing) Central government administration General agriculture, fishing and forestry sector 2 2 General industry and trade sector Health 1 1 Theme Code (as % of total Bank financing) Administrative and civil service reform Law reform Poverty strategy, analysis and monitoring Public expenditure, financial management and procurement Regulation and competition policy viii

16 Tanzania Fifth Poverty Reduction Support Credit - P0967 Original Actual Sector Code (as % of total Bank financing) Central government administration Crops 1 1 General industry and trade sector 1 1 Health 1 1 Roads and highways 1 1 Theme Code (as % of total Bank financing) Health system performance Infrastructure services for private sector development Public expenditure, financial management and procurement Regulation and competition policy Rural policies and institutions Sixth Poverty Reduction Support Credit (PRSC6) - P Original Actual Sector Code (as % of total Bank financing) Central government administration 4 4 Crops General education sector Health Roads and highways Theme Code (as % of total Bank financing) Education for all Health system performance Infrastructure services for private sector development Public expenditure, financial management and procurement Rural policies and institutions ix

17 Tanzania Seventh Poverty Reduction Support Credit - P Original Actual Sector Code (as % of total Bank financing) Central government administration General agriculture, fishing and forestry sector General education sector 1 1 General energy sector Health Theme Code (as % of total Bank financing) Administrative and civil service reform Education for all Health system performance Other public sector governance Public expenditure, financial management and procurement Tanzania Poverty Reduction Support Credit 8 - P Original Actual Sector Code (as % of total Bank financing) Central government administration 2 2 General agriculture, fishing and forestry sector 2 2 General industry and trade sector 2 2 General public administration sector 2 2 Theme Code (as % of total Bank financing) Administrative and civil service reform Environmental policies and institutions Other financial and private sector development Poverty strategy, analysis and monitoring Public expenditure, financial management and procurement x

18 E. Bank Staff Tanzania PRSC-4 - P0909 Positions At ICR At Approval Vice President: Obiageli Katryn Ezekwesili Gobind T. Nankani Country Director: Mercy Miyang Tembon (Acting) Judy M. O'Connor Sector Manager: J. Humberto Lopez Kathie L. Krumm Task Team Leader: Paolo B. Zacchia Robert Johann Utz ICR Team Leader: Yutaka Yoshino ICR Primary Author: Peter Miovic Tanzania Fifth Poverty Reduction Support Credit - P0967 Positions At ICR At Approval Vice President: Obiageli Katryn Ezekwesili Hartwig Schafer (Acting) Country Director: Mercy Miyang Tembon (Acting) Judy M. O'Connor Sector Manager: J. Humberto Lopez Kathie L. Krumm Task Team Leader: Paolo B. Zacchia Robert Johann Utz ICR Team Leader: Yutaka Yoshino ICR Primary Author: Peter Miovic Sixth Poverty Reduction Support Credit (PRSC6) - P Positions At ICR At Approval Vice President: Obiageli Katryn Ezekwesili Obiageli Katryn Ezekwesili Country Director: Mercy Miyang Tembon (Acting) John McIntire Sector Manager: J. Humberto Lopez Kathie L. Krumm Task Team Leader: Paolo B. Zacchia Paolo B. Zacchia ICR Team Leader: Yutaka Yoshino ICR Primary Author: Peter Miovic Tanzania Seventh Poverty Reduction Support Credit - P Positions At ICR At Approval Vice President: Obiageli Katryn Ezekwesili Obiageli Katryn Ezekwesili Country Director: Mercy Miyang Tembon (Acting) John McIntire Sector Manager: J. Humberto Lopez Kathie L. Krumm Task Team Leader: Paolo B. Zacchia Paolo B. Zacchia ICR Team Leader: Yutaka Yoshino ICR Primary Author: Peter Miovic xi

19 Tanzania Poverty Reduction Support Credit 8 - P Positions At ICR At Approval Vice President: Obiageli Katryn Ezekwesili Obiageli Katryn Ezekwesili Country Director: Mercy Miyang Tembon (Acting) John McIntire Sector Manager: J. Humberto Lopez Kathie L. Krumm Task Team Leader: Paolo B. Zacchia Paolo B. Zacchia ICR Team Leader: Yutaka Yoshino ICR Primary Author: Peter Miovic F. Results Framework Analysis Program Development Objectives (from Program Document) This PRSC series supports the implementation of the Country Assistance Strategy and contributes to the achievement of Tanzania s Growth and Poverty Reduction Strategy (MKUKUTA) objectives in several ways: by funding MKUKUTA implementation; by fostering policy reform and institutional changes in the outcome areas; and by supporting the development of government systems for the implementation and monitoring of MKUKUTA. The PRSC focuses on the following development objectives: (i) reduce income poverty, (ii) improve key human development objectives, and (iii) improve the capacity of the Government to design and implement development policies in a transparent and efficient manner. (a) PDO Indicator(s) Tanzania PRSC-4 - P0909 Indicator Baseline Original Target s (from approval documents) Formally Revised Target s Actual Achieved at Completion or Target Years Indicator 1 : Credit to Private Sector (% of GDP) 7.9 % 13% 17% (incl. % Fully achieved xii

20 Indicator 2 : "Doing Business" Rank Steady 140 improvement 128 (DB 2011) Tanzania's DB ranking continued to decline 3 years in row from DB (incl. % 2008 report to DB 2011 report. Indicator 3 : Agricultural GDP growth (%).4 % 10% 3.2% (incl. % Off-track Indicator 4 : Rural roads rehabilitation (km) 4,00 1,000 N/A (incl. % Indicator : This was dropped as an indicator in the later PRSC operations in the series. Proportion of children under two years that receive three doses of vaccine against diphtheria, pertussis (whopping cough), tetanus, and hepatitis B (%) 71% 90% 88% In the later operations. the target value was modified to 8%, which was (incl. % achieved. Indicator 6 : National HIV prevalence in the 1 to 24 years age group 7.% 6% 2.4% 12/31/ /30/2008 (incl. % Fully achieved. xiii

21 Indicator 7 : Net primary school enrolment 94.8% 99% 9.4% (incl. % Not achieved but positive progress. Indicator 8 : Transition rate from standard VII to Form I (%) 36.1% 0% 43.9% 12/31/ /30/2010 (incl. % It reached 6.7% in 2007/08, but subsequently declined. Indicator 9 : Gross tertiary education enrolment ratio 0.% 10%.3% In the later operations in the series, the target value was modified to 6%, (incl. % which was not achieved. Progress on track Indicator 10 : Gross enrolment ratio higher education 0.27% 6%.3% 12/31/ /30/2010 (incl. % Indicator 11 : The MKUKUTA target was later changed to 2.8% by 2010, which was met. This was dropped as an indicator in the later PRSC operations in the series. Percentage of the population that has access to clean and safe water from a piped or protected source (Rural) 3.% (Urban) 73 % (Rural) 6% (Urban) 90% (Rural) 7.8% (Urban) 86% (incl. % Not achieved but positive progress. xiv

22 Indicator 12 : Quarterly NACSAP implementation reports published and discussed (number) /31/2010 (incl. % Indicator 13 : Current pay as a proportion of government's pay target (%) 86% 100% 90% The later operations in the series revised the target to 90% which was (incl. % achieved. Indicator 14 : Percentage of court cases outstanding for two years or more (%) 70% 40% 13% (incl. % Fully achieved. Indicator 1 : Number of strategic plans of central and sector ministries containing a strategic objective to implement decentralization by devolution 1 All N/A (incl. % Indicator 16 : Recurrent budget deviation 18% 10% 12.7% (incl. % Not achieved. Positive progress. xv

23 Indicator 17 : Quality of NAO Audit Report NAO starting to introduce INTOSAI and ISA Fully compliant with international standards 9 out of 10 Afrosai 2 conditions were met (incl. % Not fully achieved, but on track. Indicator 18 : Delay in submission of NAO Audit Report to Parliament 6 months 0 month 0 month (incl. % Fully achieved. Indicator 19 : Number of procuring entities complying with the Public Procurement Act % 80% 73% (incl. % Not achieved. But positive progress. Tanzania Fifth Poverty Reduction Support Credit - P0967 Original Target Formally Baseline s (from Revised Indicator approval Target documents) s Indicator 1 : Credit to Private sector Tsh 1.2 bn 30% annual increase (Tsh 4. bn by 2010) Actual Achieved at Completion or Target Years Tsh.2 bn 06/30/200 12/31/ /30/2010 (incl. % Fully achieved. xvi

24 Indicator 2 : "Doing Business" Rank Steady (DB 2011) improvement Tanzania's DB ranking continued to decline 3 years in row from DB (incl. % 2008 to DB Rural Development - Number of districts qualifying for top up grants (in Indicator 3 : addition to base grants) according to agreed performance criteria /31/2010 (incl. % Indicator 4 : Agriculture Sector Growth (%).8% 10% 3.2% (incl. % Off-track. Indicator : Electricity - Installed capacity (NW) 1278 MW 1077 MW (incl. % Not achieved. Positive progress from 889 MW in 200. Indicator 6 : Electricity - Reliability of supply (%) 8% 12/31/2010 (incl. % xvii

25 Indicator 7 : Electricity - Number of customers connected to national grid and offgrid sources. 20% 14.% (incl. % Indicator 8 : The PRSC target was introduced later for 12.9% by 2010, which was achieved. Proportion of children under 2 that receive three doses of vaccine against diphtheria, pertussis, tetanus, and hepatitis B (%) 71% 8% 88% (incl. % Fully achieved. Indicator 9 : National HIV prevalence in the 1 to 24 years age group 4% 4% 2.4% 12/31/ /30/2008 (incl. % Fully achieved. Indicator 10 : Net primary school enrolment (by gender) (Average) 94.8% (Boys) 9.6% (Girls) 93.9% (Average) 99.0% (Boys) 99.0% (Girls) 99.0% xviii (Average) 9.4% (Boys) N/A at completion (Girls) N/A at completion For gross primary enrollment rate: (average) 106.4, (boys) 107 and (incl. % (girls) 100 Indicator 11 : Transition rate from standard VII to Form I (by gender) (Average) 36.1% (Average) 0% (Average) 43.9% (Boys) 36.6% (Boys) 0% (Boys) 48.3% (Girls) 3.6% (Girls) 0% (Girls) 39.6% (incl. % No achieved.

26 Indicator 12 : Gross enrolment ratio higher education 0.27% 6%.3% (incl. % Not achieved. Positive progress. Indicator 13 : Percentage of the population that has access to clean and safe water from a piped or protected source (Rural) 3.% (Urban) 73% (Rural) 6% (Urban) 90% (Rural) 7.8% (Urban) 86% (incl. % Not achieved. Positive progress. Indicator 14 : Quarterly NACSAP implementation reports published and discussed (number) /31/2010 (incl. % Indicator 1 : Current pay as a proportion of government's pay target (%) 86% 100% 90% The PRSC target set in a later operation in the series was 90% by 2010, (incl. % which was achieved. Indicator 16 : Percentage of court cases outstanding for two years or more (%) 70% 40% 13% (incl. % Fully achieved. xix

27 Indicator 17 : Share of total government budget allocated directly to LGAs, which does not go through ministerial votes and is calculated on a formula basis xx 2% 12/31/2010 (incl. % Indicator 18 : Recurrent budget deviation 18% 10% 12.7% (incl. % Not achieved. Positive progress. Indicator 19 : Quality of NAO Audit Report NAO starting to introduce INTOSAI and ISA Fully compliant with international standards 9 out of 10 AFROSAI 3 conditions met (incl. % Indicator 20 : Delay in submission of NAO Audit Report to Parliament 6 months 0 month 0 month (incl. % Indicator 21 : Number procurement entities complying with the Public Procurement Act 2004 N/A 80% 73% (incl. % Not achieved. Positive progress from 39% in FY06/07.

28 Sixth Poverty Reduction Support Credit (PRSC6) - P Original Target Formally Baseline s (from Revised Indicator approval Target documents) s Indicator 1 : Rural poverty head count xxi Actual Achieved at Completion or Target Years 39% 34% 37% (2007 HBS) 1 (incl. % Based on the latest 2007 HBS survey data. Indicator 2 : Under years of age mortality /31/ (incl. % Fully achieved. Indicator 3 : Literacy of 1+ age group 69% 80% 70% 2 12/31/ The program document reported male only literacy rate (79%) for (incl. % The adult literacy rate for both male and female in 2002 was 69%. Indicator 4 : WGI indicators on accountability /31/ (incl. % Indicator : WGI indicators on control of corruption

29 (incl. % Indicator 6 : WGI indicators on government effectiveness (incl. % Tanzania Seventh Poverty Reduction Support Credit - P Original Target Formally Actual Indicator Baseline s (from Revised Achieved at approval Target Completion or documents) s Target Years Indicator 1 : Rural poverty head count 39% 34% 37% (2007 HBS) 1 (incl. % 37% based on the latest HBS survey data in Indicator 2 : Under mortality (out of 1000 lives) /31/ (incl. % Fully achieved. Indicator 3 : Literacy of 1+ age group 69% 80% 70% 2 12/31/ The program document reported male only literacy rate (79%) for (incl. % The adult literacy rate for both male and female in 2002 was 69%. xxii

30 Indicator 4 : WGI indicators on accountability /31/ (incl. % Indicator : WGI indicators on control of corruption /31/ (incl. % Indicator 6 : WGI indicators on government effectiveness /31/ (incl. % Tanzania Poverty Reduction Support Credit 8 - P Original Target Formally Baseline s (from Revised Indicator approval Target documents) s Indicator 1 : Rural poverty head count xxiii Actual Achieved at Completion or Target Years 39% 34% 37% (HBS 2007) 1 (incl. % 37% based on the latest HBS survey (2007) Indicator 2 : Under mortality (2009 data) 4 Fully achieved based on 2009 (latest) data.

31 (incl. % Indicator 3 : Literacy of 1+ age group 69% 80% 70% (2009) 2 The program document reported male only literacy rate (79%) for (incl. % The adult literacy rate for both male and female in 2002 was 69%. Indicator 4 : WGI indicators on accountability (2009) (incl. % Based on the 2009 WGI (latest) Indicator : WGI indicators on control of corruption (2009) (incl. % Based on the 2009 WGI (latest) Indicator 6 : WGI indicators on government effectiveness (2009) (incl. % Based on the 2009 WGI (latest) xxiv

32 (b) Intermediate Outcome Indicator(s) Tanzania PRSC-4 - P0909 Indicator Indicator 1 : Indicator 2 : Baseline Original Target s (from approval documents) Formally Revised Target s Fiscal deficit (after grants)as % of GDP 6% Consistent with PRGF target Actual Achieved at Completion or Target Years 6.4% Not achieved. The target for 2010 was.7%. Inflation rate 4.% Consistent with PRGF target 10.6% Not achieved. Target for 2010 was between 8 and 10%. Tanzania Fifth Poverty Reduction Support Credit - P0967 Original Target Formally s (from Revised Indicator Baseline approval Target documents) s Indicator 1 : Fiscal deficit after grants (% of GDP mp) -3.4% Consistent with PRGF target Actual Achieved at Completion or Target Years 6.4% Not achieved. PSI Target.7% xxv

33 Indicator 2 : Inflation rate (%, period average) 4.1% 4 Consistent with PRGF target 10.6% Not achieved. PSI target 8-10% Sixth Poverty Reduction Support Credit (PRSC6) - P Original Target Formally s (from Revised Indicator Baseline approval Target documents) s Indicator 1 : Indicator 2 : Indicator 3 : Fiscal deficit (after grants) as percent of GDP 6% 4% (PSI target) 6.4% Actual Achieved at Completion or Target Years Not achieved. PSI target for 2010 was.7% Inflation rate (average, FY).1% 7.3% 10.6% Not achieved. PSI target for 2010: 8-10% Increase Ranking on "Doing Business" (DB 2011) Not achieved. Tanzania's DB ranking declined 3 years in row from DB 2008 to DB2011. xxvi

34 Indicator 4 : Indicator : Indicator 6 : Indicator 7 : Indicator 8 : Credit to private sector (% of GDP) 8.9% 11.9% 17% Fully achieved. Installed MW power capacity 889 MW 1278 MW 1077 MW Not achieved. Positive progress. PRSC target for 2010 introduced in a later operation was 130. Reliability of power supply 62% 71% 8% Fully achieved. Share of national and regional roads in good and fair condition (Good) (Good) 7% (Good) 6% 47% (Fair) 20% (Fair) 33% (Fair) 3% Not achieved. Positive progress. Agriculture sector 3-year average growth rate 4.4% 6% 3.9% Not achieved. xxvii

35 Indicator 9 : Revenue received from concession and license in forestry, as % of their estimated value N/A 12/31/ billion Tsh collected in 2010 compared to 18 billion (2009) and 22 billion (2007) Indicator 10 : Number of districts qualifying for top up grants Indicator 11 : Indicator 12 : Indicator 13 : Not achieved. Positive progress % of passable rural roads (in good and fair condition) 0% 7% 6% Not achieved. Number of customers connected to national grid and off-grid sources 8.2% 11.1% 14.% Fully achieved. % of children less than 2 years receiving 3 doses of vaccines (%) 71% 8% 88% Fully achieved. xxviii

36 Indicator 14 : Indicator 1 : Indicator 16 : Indicator 17 : Indicator 18 : % of births attended by a skilled health worker 41% 80% 1% 6 Not achieved. Positive progress. The PRSC target introduced in a later operation was 6% by National HIV prevalence in the 1 to 24 years age group 4% 4% 2.4% (FY07/08) 3 Fully achieved. Net primary enrollment 94.8% (Boys) 99% 9.6% (Boys) 99% (Girls) (Girls) 99% 93.9% 9.4% (Boys) NA at completion (Girls) NA at completion Gross primary enrollment with boys 107, girls 100. Qualified teacher/pupil ratio in primary education 1:73 1:62 1:4 The target value was changed to 1:4 in a later operation, which was met. Gross tertiary education enrollment ratio 0.27% 6%.3% 2 Not achieved. Positive progress. xxix

37 Indicator 19 : Indicator 20 : Indicator 21 : Percentage of the population that has access to clean and safe water (Rural) 3% (Rural) 6% (Rural) 7.8% (Urban) (Urban) 90% (Urban) 86% 73% 12/31/ /31/2010 Not achieved. Positive progress. Number of grand corruption cases prosecuted as % of investigated cases 20% 0% N/A at completion 30 grand corruption cases prosecuted in 2010, compared to 1 (2007), 14 (2008), and 17 (2009). % of court cases outstanding for 2 years or more 8% 40% 13% 12/31/ /01/2010 Fully achieved. Indicator 22 : Current pay as a proportion of government's pay target (%) 86% 100% 90% 12/31/ /31/ %. The PRSC target in a later operation was 90% for 2010, which was fully achieved. Indicator 23 : % of LGA expenditures calculated on a formula basis 1% 2% 19.4% 06/30/200 12/31/ /31/2010 Not achieved. Positive progress. xxx

38 Indicator 24 : Indicator 2 : Indicator 26 : Indicator 27 : Recurrent budget deviation 18% 10% 12.7% Not achieved. NAO starting to introduce INTOSAI and ISA Fully compliant On track with AFROSAI 3 9 out of 10 AFROSAI 3 conditions met Not achieved. Positive progress. Delay in submission of NAO Audit Report to Parliament 6 months 0 months 0 month Fully achieved. Number of procuring entities complying with the Public Procurement Act % 80% 73% 06/30/200 7 Not achieved. xxxi

39 Tanzania Seventh Poverty Reduction Support Credit - P Original Target Formally s (from Revised Indicator Baseline approval Target documents) s Indicator 1 : Indicator 2 : Indicator 3 : Indicator 4 : Fiscal deficit (after grants) as percent of GDP 6% % (PSI target) 6.4% Actual Achieved at Completion or Target Years Not achieved. PSI target.7%. Inflation rate (average, FY).1% less than % 10.6% Not achieved. PSI target 8-10% Improve ranking in "Doing Business Indicators" (DB 2011) Not achieved. Credit to private sector (% of GDP) 8.9% 13% 17% Fully achieved. xxxii

40 Indicator : Indicator 6 : Indicator 7 : Indicator 8 : Indicator 9 : Time taken for a container from off-loading until clearing from port (import data) 20.1 days 12 days 12. days Close to achievement. Installed MW power capacity 889 MW 1091 MW 1077 MW Not achieved. Positive progress. Availability of power supply 62% 71% 8% Fully achieved. Share of national and regional road in good and fair condition (Good) (Good) 7% (Good) 6% 47% (Fair) 20% (Fair) 33% (Fair) 3% Not achieved. Positive progress. Agriculture sector 3-year average growth rate 4.4% 6% 3.9% Not achieved. xxxiii

41 Indicator 10 : Indicator 11 : Indicator 12 : Indicator 13 : Revenues received from concession and license in forestry, as % of their estimated value 4-1% 0% N/A at completion 7 34 billion Tsh collected in 2010 compared to 18 billion (2009) and 22 billion (2007) Number of districts qualifying for top up grants Not achieved. Positive progress. % of passable rural roads (in good and fair condition) 0% 70% 6% Number of customers connected to national grid and off-grid sources 8.2% 12.9% 14.% Fully achieved. Indicator 14 : % of children <2 years receiving 3 doses of vaccines (%) 71% 8% 88% 12/31/ /31/2010 Fully achieved. xxxiv

42 Indicator 1 : Indicator 16 : Indicator 17 : Indicator 18 : Indicator 19 : Percentage of the population that has access to clean and safe water (Rural) 4% (Rural) 6% (Rural) 7.8% (Urban) (Urban) 90% (Urban) 86% 73% 12/31/ /31/2010 Not achieved. positive progress. National HIV prevalence in the 1 to 24 years age group 4% 4% 2.4% (FY07/08) 3 Fully achieved. Net primary enrollment (All) 73% (Boys) (All) 99% 71% (Boys) 99% (Girls) (Girls) 99% 7% (All) 9.4% (Boys) N/A at completion. (Girls) N/A at completion. Gross primary enrollment (Boys 107; Girls 100) Percentage of cohort completing primary education (Standard IV) 66.9% 69% 69.3% Fully achieved. Qualified teacher/pupil ratio in primary education 1:73 1:4 1:4 Not achieved. Positive progress. xxxv

43 Indicator 20 : Indicator 21 : Indicator 22 : Tertiary education enrollment ratio 0.27% 6%.3% 2 Not achieved. Positive progress. Number of grand corruption cases prosecuted as % of investigated cases 20% 0% N/A at completion 30 grand corruption cases prosecuted in 2010, compared to 1 (2007), 14 (2008), and 17 (2009) % of court cases out-standing for 2 years or more 70% 40% 13% 12/31/ /31/2010 Fully achieved. Indicator 23 : Current pay as a proportion of government's pay target (%) 86% 100% 90% 12/31/ /31/2010 The target value for PRSC was set to 90% in the later operation, which was achieved. Indicator 24 : % of LGA expenditures calculated on a formula basis 16% 2% 19.4% 06/30/200 7 Not achieved. Positive progress. xxxvi

44 Indicator 2 : Indicator 26 : Recurrent budget deviation 18% 10% 12.7% Not achieved. Positive progress. NAO starting to introduce INTOSAI and ISA Fully compliant with Afrosai 3 9 out of 10 AFROSAI 3 conditions were met. Not achieved. Close to achievement. Indicator 27 : Delay in submission of NAO Audit Report to Parliament 6 months 0 months 0 month Indicator 28 : Indicator 29 : Fully achieved. Number of procuring entities complying with the Public Procurement Act % 80% 73% 06/30/200 7 Not achieved. Positive progress. Number of procuring entities complying with the Public Procurement Act % 80% 06/30/ /31/2010 xxxvii

45 Indicator 30 : % of births attended by skilled health worker 41% 6% 1% 6 Not achieved. Positive progress. Tanzania Poverty Reduction Support Credit 8 - P Original Target Formally s Revised Indicator Baseline (from Target approval s documents) Indicator 1 : Indicator 2 : Indicator 3 : Fiscal deficit (after grants) as percent of GDP 6% % (PSI target) 6.4% Actual Achieved at Completion or Target Years Not achieved. PSI target.7% Inflation rate (average, CY).1% Less than % 10.6% Not achieved. PSI target 8-10%. Improve ranking in "Doing Business Indicators" (DB 2011) Not achieved. Tanzania's DB ranking declined 3 years in row from DB 2008 to DB The Tanzania s ranking of 131th place in DB 2010 was adjusted to 12th place in DB xxxviii

46 Indicator 4 : Indicator : Indicator 6 : Indicator 7 : Indicator 8 : Credit to private sector (% of GDP) 8.9% 13% 17% Fully achieved. Time taken for a container from off-loading until clearing from port (import data) 20.1 days 12 days 12.% Not achieved. Close to achievement. Installed MW power capacity 889 MW 1091 MW 1077 MW Not achieved. Positive progress. Availability of power supply 62% 71% 8% Fully achieved. Share of national and regional roads in good and fair condition (Good) (Good) 7% (Good) 6% 47% (Fair) 20% (Fair) 33% (Fair) 3% Not achieved. Positive progress. xxxix

47 Indicator 9 : Indicator 10 : Indicator 11 : Indicator 12 : Indicator 13 : Agriculture sector three-year average growth rate 4.4% 6% 3.9% Not achieved. Revenues received from concession and license in forestry, as % of their estimated value 4-1% 0% N/A at completion 7 34 billion Tsh collected in 2010 compared to 18 billion (2009) and 22 billion (2007) Number of district qualifying for top up grants Not achieved. Positive progress. % of passable rural roads (in good and fair condition) 0% 70% 6% Not achieved. Positive progress. Number of customers connected to national grid and off-grid sources 8.2% 12.9% 14.% Fully achieved. xl

48 Indicator 14 : Indicator 1 : Indicator 16 : Indicator 17 : Indicator 18 : % of children <2 years receiving three doses of vaccines 71% 8% 88% Fully achieved. % of births attended by a skilled health worker 41% 6% 1% 6 Not achieved. Positive progress. National HIV prevalence in the 1 to 24 years age group 4% 4% 2.4% (FY07/08) 3 Fully achieved. Net primary enrollment (All) 73% (Boys) (All) 99% 71% (Boys) 99% (Girls) (Girls) 99% 7% (All) 9.4% (Boys) N/A at completion (Girls) N/A at completion Gross primary enrollment (boys 107 and girls 100) Percentage of cohort completing primary education (Standard IV) 66.9% 69% 69.3% Fully achieved. xli

49 Indicator 19 : Indicator 20 : Indicator 21 : Indicator 22 : Indicator 23 : Qualified teacher/pupil ratio in primary education 1:73 1:4 1:4 Not achieved. Positive progress. Tertiary education enrollment ratio 0.27% 6% 2 12/31/2010 Percentage of the population that has access to clean and safe water (Rural) 4% (Rural) 6% (Rural) 7.8% (Urban) (Urban) 90% (Urban) 86% 73% 12/31/ /31/2010 Number of grand corruption cases prosecuted as % of investigated cases 20% 0% N/A at completion 30 grand corruption cases prosecuted in 2010, compared to 1 (2007), 14 (2008), and 17 (2009) % of court cases outstanding for 2 years or more 70% 40% 13% Fully achieved. xlii

50 Indicator 24 : Current pay as a proportion of Government's pay target (%) 86% 90% 90% 12/31/ /31/2010 Achieved. Indicator 2 : % of LGA expenditure calculated on a formula basis Indicator 26 : Indicator 27 : 16% 2% 19.4% 06/30/200 7 Not achieved. Recurrent budget deviation 18% 10% 12.7% Not achieved. Positive progress. NAO starting to introduce INTOSAI and ISA Fully compliant with Afrosai 3 9 out of 10 AFROSAI 3 conditions were met. Not achieved. Close to achievement. Indicator 28 : Delay in submission of NAO audit report to Parliament 6 months 0 month 0 month Fully achieved. xliii

51 Indicator 29 : Number of procuring entities complying with the Public Procurement Act % 80% 73% 06/30/200 6 Not achieved. Positive progress. G. Ratings of Program Performance in ISRs Tanzania PRSC-4 - P0909 No. Date ISR Archived DO xliv IP Actual Disbursements (USD millions) 1 06/30/2006 Satisfactory Satisfactory /04/2006 Satisfactory Satisfactory Tanzania Fifth Poverty Reduction Support Credit - P0967 Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 03/11/2008 Satisfactory Satisfactory Sixth Poverty Reduction Support Credit (PRSC6) - P Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 06/29/2009 Moderately Satisfactory Moderately Satisfactory Tanzania Seventh Poverty Reduction Support Credit - P No. Date ISR Archived DO IP Actual Disbursements (USD millions) 1 03/02/2010 Moderately Satisfactory Moderately Satisfactory /2/2010 Moderately Satisfactory Moderately Satisfactory Tanzania Poverty Reduction Support Credit 8 - P Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 04/17/2011 Moderately Satisfactory Satisfactory

52

53 1. Program Context, Development Objectives and Design 1.1 Context at Appraisal Summary of Economic and Structural Sector Background Starting in the late 1980s, but implemented with vigor mainly since the mid-l990s. Tanzania carried out a broad structural and social reform agenda. After the initial macroeconomic stabilization and the removal of key distortions in the economy, reforms focused on improving economic governance, providing an enabling environment for private sector activities, and enhancing public service delivery. As a consequence of its strong performance, Tanzania gained access to irreversible debt relief by reaching the completion point under the enhanced HIPC Initiative in December 2001 and additional debt relief from bilateral donors in In present value (PV) terms, the public sector debt stood at about 12 percent of GDP at end-june 2009, or 3. percent of exports, both eminently sustainable. As a result of these reforms and policy measures, Tanzania s GDP growth accelerated over time, reaching an average of almost 4 percent per annum in the second half of the 1990s, and has been consistently in the 6-7 % range since then (Table 1). Table 1: Selected Economic Indicators (at the time of PRSC-8 Appraisal) (in percent, unless otherwise specified) Output and Prices GDP growth Annual Inflation (CPI, period avg.) Money (as % of GDP) M2 to GDP Private credit to GDP Balance of Payments Current account balance to GDP Official reserves in months of imports Exchange and Interest Rates Exchange rate (T Sh per USD) Interest rate (T-Bond) FY04 /0 FY0 /06 FY06 /07 FY07 /08 FY08 /09 FY09/ 10 Fiscal Developments Domestic Revenue to GDP Overall budget deficit to GDP (after grants) Overall budget deficit to GDP (before grants) Domestic borrowing to GDP Source: Tanzanian authorities, IMF, World Bank estimates, as presented in PRSC-8 program document Thus, the appraisal of PRSC 4 in early 2006, the first in a planned program of five PRSCs, took place in an environment of strong economic growth that had some 1

54 momentum behind it. Inflation, though still too variable, was in the single digit range. Foreign exchange reserves were comfortable, although current account balance was growing due to an import growth rate that far exceeded the rate of growth of exports. Domestic revenue to GDP ratio was improving, although from a low level, and overall budget deficit (after grants) was in a range that did not require domestic borrowing at a level that would crowd out the private sector. Credit to the private sector was rising rapidly, both in absolute terms as well as relative to GDP. While data on income-poverty incidence at the time of appraisal of the first operation of the series (PRSC-4) were somewhat old (the latest available year was see Table 2 below), the trends observed from were not particularly encouraging. The increasingly strong GDP growth performance during the 1990s, had not led to a major reduction in income poverty, except in Dar-es-Salaam. In other urban areas, and particularly in the countryside where the vast majority of the poor lived, the declines were within the margin of sampling error (i.e. not statistically significant). Little poverty reduction in the countryside should have been an early sign that more attention had to be paid to the rural sector. Still, there was hope that strong growth in the almost five years that had elapsed between the last set of data on poverty and the appraisal of PRSC 4, would have lifted many additional people out of poverty. Table 2: Changes in Income-Poverty Incidence Dar es Salaam Other urban Rural Tanzania Mainland Source: National Bureau of Statistics and World Bank staff estimates In the event, the Household Budget Survey (HBS) of 2007, showed a poverty picture that was disappointing (but see caveats below). The disconnect between growth and poverty reduction during was even stronger than in the preceding period. This was attributed to four main factors. First, GDP growth was driven by sectors that were predominantly urban or were in other ways weakly linked to the rural sector (construction, telecommunications, financial intermediation, and mining). Second, almost three quarters of the higher growth in the 1990s and well into the 2000s was driven by higher foreign aid inflows feeding into the government budget. As a result, public consumption strongly outpaced private consumption, and it is the latter that forms the basis for measuring income poverty (WB CEM 2007). Third, the rate of growth of agriculture did not far outpace the rate of growth of population. Fourth, the rate of growth of agriculture may have been overestimated. If the overestimate is significant, it would contribute to stagnation in poverty reduction in the countryside (as well as pull down the overall rate of growth of GDP). In addition, some of the consumption increase occurred in consumer durables over the year which are not included in the consumption basket of the Household Budget Survey (HBS). 2

55 Recent re-examinations of the 2007 HBS data, embellished by data from other surveys, show that in dimensions other than just the reduction of income poverty, Tanzania fared better over the same period ( ). Public spending was clearly pro-poor, with affordable services benefitting the lower quintiles of the income distribution. Urban areas realized important gains in access to non-farm employment, and earnings increased substantially. Real gains in wealth were made by all quintiles as measured by increased possession of consumer durables and better housing. The picture in the countryside remained less encouraging, although there were areas that had benefitted by higher prices of their produce or better roads. Further work is being done on improving the methodology and processes of the HBS. The situation in other aspects of people s well-being was more encouraging at the time of appraisal. Between years 2000 and 200, net primary school enrollment increased from 7 to 9 percent. Life expectancy increased from 49 years in 1988 to years in Infant mortality dropped from 11 per 1000 in 1988 to 68 per 1000 in The fraction of chronically undernourished or stunted children declined from 44 percent in 1999 to 38 percent in Other indicators recorded less progress. Maternal mortality which was 29 per 100,000 births in 1996 had not changed, nor had fertility which averaged.7 children per woman. 3 The proportion of the population with access to piped or protected water as their main source of drinking water remains very low, especially in rural areas where, depending on the source, between 46 (census) and 2 (HBS 2007) percent had access. In terms of governance, the first series of PRSCs (PRSC 1-3) supported the development of annual plans and performance budgets and service delivery surveys. Based on these, the government published the first State of the Public Service report. The report showed that citizens were increasingly satisfied with a number of key public services (like primary education). However, it also indicated that levels of dissatisfaction were still alarmingly high. Around 2 percent of all clients were dissatisfied with central government services and 0-7 percent with local government services. Service delivery was still perceived as being riddled with bureaucracy and needed to improve in terms of timeliness. There were issues with resource leakages and public financial management. Efforts to reduce corruption were perceived as moving slowly. Rationale for Bank Assistance The Bank s PRSC support to Tanzania is provided within a harmonized framework for general budget support (GBS) with 13 other development partners (DPs), comprising a Performance Assessment Framework (PAF), a Partnership Framework Memorandum (PFM) for GBS for the implementation of MKUKUTA, and a joint review process which culminates in a joint Annual Review (AR) in October/November. The framework is 1 Later, the number for infant mortality has declined further to 1 per 1000 in 2009 based on 2009/10 Tanzania Demographic and Health Survey (TDHS) 2009/10. 2 Based on TDHS 2009/10, it further dropped to The more recent number from 2009/10 TDHS is 44 per 100,000 live births in