Tanzanian Association Oslo

Financial Crisis Boost:

Tanzania Receives $37.7 million

from U.S. for Economic Stimulus

U.S. Deputy Secretary of Treasury Announces Funding During Meeting Monday with President Kikwete.

November 2, 2009

Times are tough worldwide since the start of the global financial crisis. While the U.S. has been hit hard, the American people understand that effects have been especially great in Tanzania. To help cushion the impact, President Obama and the United States Congress have authorized a $37.7 million U.S. dollar “Financial Crisis Initiative” to directly benefit Tanzania’s poor. This assistance was formally announced by U.S. Deputy Secretary of the Treasury Neal S. Wolin during his meeting with President Kikwete at State House today.

The World Food Program (WFP) is teaming-up with the United States Agency for International Development (USAID) to manage the effort, underlining the United States’ commitment to partner with the UN and other donors to support Tanzania’s development.

"The U.S. is pleased to partner with committed African countries such as Tanzania to help them emerge from the global financial crisis and flourish in the years ahead," Deputy Secretary Wolin said. "From spurring country-led agricultural development to offering technical assistance, we look forward to strengthening and deepening our partnership with Tanzania."

The World Bank and IMF project that the global financial crisis will reduce Tanzania’s economic growth from over 7% in 2008 to 4-5% in 2009. With over 40,000 Tanzanian jobs lost already, the poor are invariably hardest hit by economic shocks. For this reason, the $37.7 million stimulus package targets the mwananchi and complements recent Tanzanian initiatives to stimulate the rural economy and increase food production.

Children are most vulnerable to food insecurity. Proper nutrition in schools helps children perform better in school and removes a heavy burden on families stretched by the rising costs of food. This Financial Crisis Assistance enables WFP to give two-meals a day for a year to 400,000 children in 600 primary schools in drought-prone districts of Arusha, Manyara, Dodoma and Singida regions. WFP will also feed students in areas affected by declining prices of exports such as cotton, horticulture, coffee and gemstones.

The stimulus package will offset job losses by offering temporary employment opportunities to thousands of Tanzania’s poorest households. These jobs programs target rural communities by compensating work to improve irrigation and access to clean water, plant trees, build food storage facilities and rehabilitate rural roads. In pastoral communities, the program will support earth dams for livestock, feedlots for value-added fattening of cattle, and better access to markets.

Wildlife Management Areas affected by falling revenue from tourism will benefit from a Conservation Corps established in those areas. Local workers will be employed building roads, ranger-posts, signage, marketing, and the management infrastructure to profitably sustain community-owned tourism ventures for the future. Tanzanian horticulture, with over 10,000 employees and $50 million annually in exports, will be sustained through support for the Tanzanian Horticultural Association (TAHA) and its mostly female smallholder members, as well as assistance to cash-strapped exporters who need to restructure loans in order to save Tanzanian jobs.

Sound fiscal and monetary policies are key components of long-term economic stability. The Financial Crisis Assistance from the American people will assist the Tanzanian Government to monitor the impact of the economic downturn and build resilience to future economic shocks. With assistance from the U.S. Treasury Department's Office of Technical Assistance, the Tanzanian Government will work to improve its information management systems for more efficient and transparent public financial management, including an enhanced ability to quickly disseminate financial resources to areas of food insecurity, which are widely dispersed geographically.

In addition to the $37.7 million Financial Crisis Initiative, USAID will partner with local banks to provide up to $10 million in credit and financing options for agribusinesses, including over 1,000 Small and Micro-enterprises and households through micro-finance over a five year period to stimulate production and improve food security.

To multiply the positive effects of partnership for the Tanzanian economy, at least 50 Tanzanian firms will be involved in local food procurement, supply of processed food products, logistical support such as transport, and design and supervision of improvements to rural infrastructure. Tanzania is one of eight countries receiving Global Financial Crisis funds of more than $255 million. Other African countries receiving this one-time assistance are Ghana, Liberia and Zambia

US Embassy Dar Es Salaam