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EU Signs Contracts Worth TZS 455 Billion to Support Tanzanian Budget

EU Support to Tanzania Budget 2023

On 5th July 2023, Tanzania’s President Dr Samia Suluhu Hassan witnessed the signing of three contracts with the European Union worth TZS 455.09 billion, along with financial aid of TZS 117.04 billion, to support the implementation of the Government’s budget.

The signing ceremony took place in Dodoma, where Dr Natu El-maamry Mwamba, the Permanent Secretary of the Ministry of Finance and Planning, represented the Tanzanian government, while Ambassador Manifredo Fanti represented the European Union.

During the event, President Samia Suluhu Hassan highlighted Tanzania’s commitment to building a better future for the youth and women in agriculture.

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To achieve this, the President expressed the intention to utilize the Tanzanian Agricultural Development Bank (TADB) and the Tanzania Investment Bank (TIB) to provide funding for the participation of young people and women in the agricultural project.

Furthermore, President Samia Suluhu Hassan requested the European Union to explore the possibility of providing financial support to government-owned banks, including TADB and TIB, to enhance their capitalization and enable them to offer loans for agricultural development and investments in the country.

Additionally, the President urged the European Union to allocate funds for the expansion of Mwanza Airport, aiming to strengthen transportation activities due to the city’s growing importance as a business hub.

Speaking at the event, Finance and Planning Minister Dr Mwigulu Lameck Nchemba emphasized the achievements resulting from cooperation with the European Union, including funding of USD 12 million out of the total earmarked USD 67.87 million for the improvement of airports in five regions: Kigoma, Tabora, Bukoba, Sumbawanga, and Shinyanga.

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Other accomplishments highlighted by Minister Nchemba included the provision of EUR 10 million for the Lake Victoria Water and Sanitation Project, bringing the total funds allocated to the project to EUR 45 million as a soft loan.

He also acknowledged the increased support from the European Union to Tanzania’s private sector, including commercial banks.

For her part, Dr Natu El-maamry Mwamba outlined several programs currently being implemented. These include a project worth EUR 70 million (approximately TZS 177.25 billion) focusing on gender issues and women’s development, led by the Ministry of Social Development, Gender, Children, and People with Disabilities.

Other initiatives comprise the Public Financial Management and Private Sector Enhancement Project (EUR 63.35 million), the ICT Improvement Project (EUR 35 million), and the Urban Development Project (EUR 75 million), which are being implemented by the Ministry of Finance and Planning, the Ministry of Communication and Information Technology, and the Office of the President – Regional Administration and Local Government (TAMISEMI), respectively.

Under the urban development program, Pemba Island in Zanzibar will benefit from the construction of social infrastructure, with an allocation of EUR 5 million (approximately TZS 12.66 billion).

Concluding the event, Ambassador Manifredo Fanti announced that in June and July, the European Union would disburse TZS 140 billion to support the government budget.

Additionally, contracts were signed to support blue economy projects, facilitate public and private sectors, and provide training materials, totalling EUR 179.35 million (approximately TZS 468 billion) over a four-year period in both

Ambassador Fanti also praised President Samia Suluhu Hassan for her policy changes aimed at promoting gender equality, which are strongly supported by the European Union.

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Tanzania – EU

The EU is a major trade and investment partner for Tanzania. In 2020, the EU was the fourth most prominent destination of Tanzania’s exports and investors from the EU contribute significantly to the Tanzanian economy.

Foreign Direct Investment from companies of the ten most active  EU Member States into Tanzania was USD 1.5 billion between 2013 and 2020.

In 2021, total trade between Tanzania and the EU reached EUR 1.3 billion, of which EUR 457 million imports from Tanzania and EUR 856 exports to Tanzania.

In February 2023, the European Investment Bank (EIB), the world’s largest multilateral bank, confirmed its first new engagement in Tanzania after seven years by signing the support to female-led companies and blue economy firms in the country with EUR 270 million.

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