Tanzania Receives Assistance for Private Sector Competitiveness Project
Tuesday, December 20, 2005
The World Bank Board of Executive Directors today approved an International Development Association (IDA) credit of US$95 million for a Private Sector Competitiveness Project which would support the implementation of Tanzania’s National Strategy for Growth and Poverty Reduction which, among other things, aims to transform the country’s economy through private sector growth.
The Private Sector Competitiveness Project will help generate sustainable conditions for enterprise creation and growth by reducing the cost of doing business and increasing the capacity of the local private sector to participate in domestic and international markets. The project will focus on enhancing skills and entrepreneurship development, and increasing access to financial services. The project has been developed with a harmonized approach to enable all donors interested in supporting the Government’s private sector-led growth targets to jointly fund and/or coordinate their activities in the sector.
“To transform the economy and generate jobs for the estimated 700,000 new entrants into the labor force every year, Tanzanian businesses require stronger growth and new entrepreneurs need to be encouraged”, said Michael Wong, the World Bank’s Task Team Leader of the project. “This project will help improve the business climate in the country, creating more opportunities for small and medium enterprises to play a greater role in the country’s growth.”
The Private Sector Competitiveness Project supports the government program through three components:
The Business Environment Strengthening component aims to lower the costs of investing in, establishing, and operating a business in Tanzania by eliminating policy, legal, regulatory, and institutional constraints that inhibit a growing and competitive private sector. It is expected to reduce the burden on businesses by eradicating as many procedural and administrative barriers as possible, and improve the quality of services provided by Government to the private sector.
The Enhancing Enterprise Competitiveness component will improve the capacity of the private sector to respond to viable opportunities in domestic, regional and international markets, by providing technical support and training to enterprises through matching grants. It will also help strengthen the Tanzania Private Sector Foundation.
The Improving Access to Financial Services component will enhance the capacity of the Financial Sector Deepening Trust (FSDT) to increase access to financial services primarily for small and medium enterprises. The FSDT, provides grant financing for financial service providers to improve their services and expand their outreach for enterprises and micro entrepreneurs.
*The credit is provided on standard International Development Association (IDA) terms, with a commitment fee of 0.35 percent, a service charge of 0.75 percent over a 40 year period of maturity which includes a 10-year grace period.