The new agreement is for a total Norwegian kroner 726 million over the next three years. Norway plans to disburse Norwegian kroner 265 million annually each of the next three years. This translates into 50 billion shillings annually at the current exchange rates, or the equivalent of 150 billion Tanzanian shillings over the next three years. The financial resources will be used by the government to implement Tanzania’s Poverty Reduction Strategy, the Mkukuta.
The new agreement is in line with the spirit of the Joint Assistance Strategy for Tanzania (JAST) and the bilateral MOU between Norway and Tanzania, where Norway stated that it would gradually increase GBS to Tanzania. Norway does this by shifting mainly earmarked project funds from the Road Sector to GBS. GBS is Tanzania’s preferred aid modality.
In his remarks at the signing ceremony, Ambassador Lomoy underlined the importance of the steps that had been taken against people involved in corruption over the last few months, and highlighted that continued fight against corruption is essential for Norway and indeed is one of the fundamental principles for the provision of GBS.
Moreover, the Ambassador emphasized the critical importance that Public Financial Management (PFM) reforms are revitalized in Tanzania as progress has been stagnant in vital PFM areas over the last few years. The launch of the new strategy for PFM reforms today is a positive step that will have to be accompanied by a firm leadership in the Ministry of Finance and Economic Affairs in order to ensure that the strategy is translated into practical work plans and that they are implemented.
The actual annual disbursement of GBS from Norway to Tanzania is decided every year based on progress in implementing Mkukuta as measured at the Annual Review of GBS. The final disbursements are contingent on Tanzania’s compliance with the underlying principles, which include anti-corruption, democratic principles, public financial management, and human rights including women’s rights.