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United Republic of Tanzania Systematic Country Diagnostic

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United Republic of Tanzania Systematic Country Diagnostic Document of The World Bank Group FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. 110894-TZ UNITED REPUBLIC OF TANZANIA SYSTEMATIC COUNTRY DIAGNOSTIC “TO THE NEXT LEVEL OF DEVELOPMENT ” (KUFIKA KWENYE NGAZI NYINGINE YA MAENDELEO ) Public Disclosure Authorized February 23, 2017 Public Disclosure Authorized International Bank for Reconstruction and Development (IBRD) & International Development Association (IDA) Eastern Africa Country Cluster 1, AFCE1 Africa Region International Finance Corporation (IFC) Sub-Saharan Africa Department Multilateral Investment Guarantee Agency (MIGA) Public Disclosure Authorized Sub-Saharan Africa Department i TANZANIA – GOVERNMENT FISCAL YEAR July 1 – June 30 CURRENCY EQUIVALENTS (Exchange Rate Effective as of January 31, 2017) Currency Unit: = Tanzania Shillings (TZS) US$1.00 = TZS 2,235 ABBREVIATION AND ACRONYMS ASIP Annual Surveys of Industrial Production ASM Artisanal mining BEST Business Environment Strengthening in Tanzania BoT Bank of Tanzania BRELA Business Registrations and Licensing Agency BRN Big Results Now BRT Bus Rapid Transit CAD Current account deficit CCM Chama Cha Mapinduzi CCROs Certificates of Customary Right of Occupancy CEM Country Economic Memorandum COP21 21 st Conference of Parties of the UNFCC CMS Common Market Score Card CPF Country Partnership Framework CPI Consumer Price Index CPIA Country Policy and Institutional Assessment CSA Climate-Smart Agriculture DAWASCO Dar es Salaam Water and Sewerage Corporation DHS Demographic and Health Survey DRC Democratic Republic of Congo DSA Debt Sustainability Analysis EAC East African Community EAMU East African Monetary Union EBA Enabling the Business of Agriculture EITI Extractive Industries Transparency Initiative EPPs Emergency power producers EPZ Export processing zone EWURA Energy and Water Utilities Regulatory Authority FCC Fair Competition Commission FCT Fair Competition Tribunal FDI Foreign direct investment FOC Fiber optic cable FSDP Fisheries Sector Development Program FSDT Financial Sector Deepening Trust of Tanzania FYDP Five Year Development Plan ii GDP Gross domestic product GNI Gross national income GRO Granted Rights of Occupancy HBS Household Budget Survey HCMIS Human Capital Management Information System HDI Human Development Index HHI Herfindahl-Hirschman Index HIPC Heavily Indebted Poor Countries HIV/AIDS Human immunodeficiency virus/acquired immune deficiency syndrome HRMIS Human resource management information system ICT Information and communication technology IT Information technology ILFS Integrated Labor Force Survey IFMS Integrated Financial Management System IMF International Monetary Fund INDC Intended Nationally Determined Contribution IPPs Independent power producers kg/ha Kilograms per hectare LGA Local Government Authority LIC Low income country LNG Liquefied natural gas LVHV Low-volume high-value MDA Ministries, departments, and agencies MDGs Millennium Development Goals MFIs Microfinance institutions MIC Middle-income country MSMEs Micro, small, and medium enterprises mt/ha Metric tons per hectare MW Mega-watt NAPA National Adaptation Program of Action NBS National Bureau of Statistics NCCS National Climate Change Strategy NEMC National Environmental Management Council NPS National Panel Survey NSDS National Skills Development Strategy NTBs Non-tariff barriers NTMs Non-tariff measures OGP Open Government Partnership PEFA Public Expenditure and Financial Accountability PER Public Expenditure Review PFM Public financial management PHC Population Housing Census PPPs Public private partnerships PPP Purchasing power parity R&D Research and development REA Rural Electrification Agency REC Regional economic community REER Real effective exchange rate SACCOs Savings and credit cooperatives SADC Southern African Development Community SCAD Social Conflict in Africa Database iii SCD Systematic Country Diagnostic SDI Service delivery indicators SDL Skills Development Levy SEZ Special economic zone SME Small and medium-sized enterprises SOE State-owned enterprise SPILL Strategic Plan for Implementation of Land Laws SSA Sub-Saharan Africa TANESCO Tanzania Electric Supply Company TASAF Tanzania Social Action Fund TAZARA Tanzania-Zambia Raiway Authority TCF Trillion cubic feet TDV Tanzania Development Vision TSIP Transport Sector Investment Programme TFP Total factor productivity TFR Total fertility rate TIC Tanzania Investment Center TIMSS Trends in International Mathematics and Science Study TIN Taxpayer Identification Number TODI Tanzania Open Data Initiative TPA Tanzania Ports Authority TRA Tanzania Revenue Authority TRL Tanzania Railways Limited TVET Technical and vocational education and training TZS Tanzanian shillings UNFCC United Nations Framework Convention of Climate Change US$ United States dollar VAT Value-added tax WBES World Bank Enterprise Survey WBG World Bank Group WGI Worldwide Governance Indicators WMAs Wildlife Management Areas WWTC World Travel and Tourism Council ZCCS Zanzibar Climate Change Strategy iv Acknowledgements The Tanzania Systematic Country Diagnostic (SCD) has been prepared by the joint IBRD/IDA, IFC, and MIGA team, led by Yutaka Yoshino (Program Leader, AFCE1) and Nadia Belhaj Hassine Belghith (Sr. Economist, GPV01) from IBRD/IDA, Dan Kasirye (Resident Representative, CAFTZ) and Aimilios Chatzinikolaou (Sr. Operations Officer, CBCCF), Sizwe Mdluli (Gcinisizwe Mdluli (Associate Operations Offier, CBCCF) from IFC, as well as Stephan Dreyhaupt (Program Manager, MIGEC) from MIGA. Other core members are Fiseha Haile (Consultant, GMF07) and Wendy Karamba (Economist, GPV01). A number of staff members from Global Practices (GPs) and Cross Cutting Solution Areas (CCSAs) of the World Bank Group participated in the preparation of this SCD (see list below). The team leaders appreciate guidance and support provided by Bella Bird (Country Director, AFCE1), Preeti Arora (Country Program Coordinator, AFCE1), Andre Bald (Program Leader, AFCE1), Gayle Martin (Program Leader, AFCE1), Frank Douamba (Chief Program Manager, CBCCF), Manuel Moses (Country Manager, CAFE1), Albert Zeufack (Chief Economist, AFRCE), Pablo Fajnzylber (Practice Manager, GPV0), Abebe Adugna (Practice Manager, GMF07), Kevin Carey (Lead Economist, GMF07), Andrew Dabalen (Practice Manager, GPV07), Eric Manes (Sr. Economist, GTCOS), George Larbi (Practice Manager, GGO19), and Lynn Scherburne-Benz (Sr. Regional Advisor, AFRVP) as well as the three peer reviewers—Kathleen Beegle (Program Leader, AFCW1), Lars Moller (Practice Manager, GMF08)), and Khwima Nthara (Program Leader, AFCW2). Tanzania SCD team Task Team Leaders IBRD/IDA Yutaka Yoshino, Nadia Belhaj Hassine Belghith IFC Dan Kasirye, Aimilios Chatzinikolaou, Sizwe Mdluli MIGA Stephan Dreyhaupt Team Members Macroeconomics & Fiscal Bill Battail, Fiseha Haile, Emmanuel Mungunasi, John Wearing, Wendeline Management Kibwe, Maike Schafer Poverty & Equity Nadia Belhaj Hassine Belghith, Elizabeth Talbert, Wendy Karamba, Pierre de Boisseson, Kenneth Simler, Robin Audy, Ericka Rascon, Mireia Duran Governance Chiara Bronchi, Denis Biseko, Verena Knippel, Anjani Kumar, Mercy Sabai, Gisbert Kinyero, Michael Okuny, Moses Kajubi Trade & Competitiveness Steven Dimitriyev, Megha Mukim, George Clarke, Neema Mwingu, Mahjabeen Haji, Michael Wong, Moses Kibirige, Lucy Fye, Maria Miller, Mary Agboli, Maryla Maliszewska, Charles Kunaka Finance & Market Andrea Dall’Olio, Yoko Doi, Michael Corlett, Valeriya Goeff, Barbara Calvi, Fernando Montes-Negret Agriculture Sarah Simmons, Holger Kray, Christopher Delgado Urban, Rural & Social Development Andre Bald, Somik Lall, Mary Bitekerezo, Marygrace Weber Environment & Natural Resources Daniel Mira-Salama, Jane Kibbassa, Veruschka Schmidt Water Yitbarek Tesemma, Ajith Kumar, Kaposo Mwambuli, Kristoffer Welsien, Helena Goldon, Carlos Batarda, George Joseph, Ani Rudra Silwal, Sabrina Sharmin Haque Transport & ICT Edward Anderson, Yonas Mchomvu, Martin Humphrey Energy and Extractives Nataliya Kulichenko, Vladislav Vucetic, Carlos Lopez, Florentina Mutafungwa Social Protection & Labor Muderis Mohammed, Manuel Salazar, Ruchira Kumar, Dino Merotto, Javier Sanchez-Reaza Health Gayle Martin, Miriam Schneidman Education Arun Joshi, Cornelia Jesse, Kaboko Nkahiga PPP Jeff Delmon Gender Isis Gaddis Climate Change Habiba Gitay Communication Loy Nabeta Administration Grace Mayala, Deliwe Ziyendammanja, Lydie Ahodehou v Table of Contents Executive Summary ...................................................................................................................................... 1 I. Introduction ....................................................................................................................................... 6 II. Tanzania’s Unique Characteristics .................................................................................................... 8 A. Rich and Diverse Natural Resources ............................................................................................ 8 B. Advantageous Location................................................................................................................. 8 C. Sociopolitical Stability .................................................................................................................. 9 D. Pathways to Growth and Poverty Reduction .............................................................................. 10 III. Growth, Poverty, and Inclusion .....................................................................................................
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