More than three million Tanzanians are set to benefit from USD 550M in new World Bank financing approved on March 31, 2026, targeting skills development, job creation, and social protection through two national programs.
The funding, provided by the International Development Association (IDA), will support the Second Education and Skills for Productive Jobs (ESPJ-II) Program with USD 300M and the Tanzania Productive Social Safety Net III (PSSN III) with USD 250M.
The two programs are designed to expand employment pathways for youth, improve access to industry-led training, and strengthen social protection systems for vulnerable households facing economic and climate-related shocks.
ESPJ-II aims to benefit around one million Tanzanians, with at least 45% women, by increasing the number of graduates with job-relevant skills aligned with priority sectors of the economy.
The program is expected to support more than 656,000 graduates in securing new or improved employment and contribute to a 10% increase in real income for individuals re-entering the labor market.
It also seeks to align approximately 80% of targeted medium-to-advanced technical training programs with industry needs while addressing skills mismatches, gaps in training quality, and unequal access to technical and vocational education.
ESPJ-II builds on previous initiatives including the Higher Education for Economic Transformation (HEET) project and the East Africa Skills for Transformation and Regional Integration Project (EASTRIP).
The program will be implemented by the Ministry of Education, Science and Technology in coordination with industry partners and training institutions, including TVET colleges and higher education institutions.
The financing follows a Program-for-Results model, where disbursements are linked to verified achievements such as increased enrollment, improved job placement rates, and expanded participation of women in skills training.
The PSSN III program will reach approximately 2.2 million people in around 100 of the poorest councils across Mainland Tanzania and Zanzibar.
It will provide support through productive cash transfers and climate-smart public works aimed at strengthening livelihoods and building resilience among vulnerable households.
Cash transfers will be combined with measures to promote savings, improve access to finance, and support investments in health, education, and income-generating activities.
The program also includes livelihood support such as business grants and entrepreneurship training targeting 10,000 youth.
Climate-smart public works will create temporary employment opportunities while developing community assets such as water harvesting systems and rangeland management infrastructure.
The project will further expand digital delivery systems, including a social registry, and strengthen links between social protection programs and employment pathways.
PSSN III will be implemented by the Tanzania Social Action Fund (TASAF), building on experience from previous phases of the program.
The earlier PSSN II phase reached 5.2 million people in 1.36 million households and contributed to a 10% reduction in poverty among beneficiaries and a nearly 20% increase in monthly consumption.
It also led to a 6 percentage-point increase in school enrollment, improved food security, and increased use of health services.
Households receiving both grants and cash transfers recorded approximately 20% higher earnings compared to those receiving only cash or public works support.
Around 71% of benefits were successfully targeted to the poorest 20% of the population.
Nathan Belete, Division Director for Tanzania, Malawi, Zambia and Zimbabwe at the World Bank, stated that earlier phases of the programs demonstrated that investing in people strengthens human capital and improves the well-being of the poorest households.
He said the new operations would expand opportunities for youth and protect vulnerable populations while supporting productive employment outcomes.
The two programs are aligned with Tanzania’s National Social Protection Policy (2023), the Second National Skills Development Strategy (NSDS-II), and the country’s long-term Development Vision 2050 (DIRA 2050).
They also form part of the World Bank Group’s Country Partnership Framework for Tanzania for the FY2025–FY2029 period, which focuses on strengthening human capital and promoting inclusive economic growth.
Additional support for PSSN III is provided through collaboration with development partners including the Republic of Ireland and the United Kingdom’s Foreign, Commonwealth and Development Office (FCDO).
Both programs incorporate strict fiduciary controls, including results-based financing, independent verification mechanisms, and oversight through audits and anti-corruption guidelines to ensure funds are used for intended purposes.
