World Bank Document

PROJECT INFORMATION DOCUMENT (PID)

APPRAISAL STAGE

Additional Financing Report No.: AB4700

1.  Country and Sector Background

The National Strategy for Growth and Reduction of Poverty (NSGRP, popularly known by the Swahili acronym MKUKUTA) and the Vision 2020/2025 for the United Republic of Tanzania outlines the main thrust of the Government of Tanzania (GoT) for tackling poverty. The MKUKUTA which has adopted the Millenium Development Goals (MDGs) focuses on three clusters for eradicating poverty: Cluster I Growth of the Economy and Reduction of Income Poverty; Cluster II Improvement of Quality of Life and Social Wellbeing: and Cluster III: Governance and Accountability. The GOT has adopted the internationally-endorsed MDGs indicator targets as the basic minimum achievements for its citizens to have a tolerable level of human existence. The GOT has further adopted the Public Expenditure Review (PER) as a tool to assess the extent to which resources are being used to meet the MKUKUTA goals, ensure fiscal discipline and accountability, prioritize between competing needs, promote efficiency, and guide the Medium-Term Expenditure Framework (MTEF).

The main development challenge for the GoT is widespread poverty as evidenced by the 2007 Household Budget Survey (HBS) which showed that 33.3% live below the basic needs poverty line compared to 36% in the 2000/2001 HBS. Access to safe drinking water in 2002 was 70% for urban and 50% for rural populations in the 2007 HBS while 34% have access to piped water and 18% have other protected water sources in the country. In addition, the population in urban areas with access to safe water has dropped significantly compared to 2001 HBS findings. Health indicators (maternal and infant mortality, malaria-related morbidity, and HIV/AIDS-related illness) remain high in spite of the many efforts of Government and other development partners. Within the strategy to attain the MDGs, the GoT expects to see improvements in many indicators – including the ones mentioned above.

The achievement of poverty reduction through the PER, MTEF, and other tools has been hampered by the failure of public sector resources to reach the poorest sections of Tanzanian society, especially in the rural and peri-urban areas. Poor performance by the public sector, skewed growth in favor of urban areas, and limited opportunities to generate higher Government revenues for targeting towards poverty-reducing programs have been identified as significant obstacles to the achievement of better poverty reduction results. Furthermore, the limited success in mobilizing traditional/informal and market mechanisms to assist the poor in their response to shocks (drought, HIV/AIDS, low producer prices, high input and food prices, etc.) has constrained the success of public sector measures to secure incomes for rural and peri-urban populations. The current worldwide fuel, food and financial crisis have compounded the problems of many developing countries --Tanzania included-- and, in the process, many people are falling below the poverty line due to food insecurity and other vulnerabilities.

The GoT is promoting the adoption of a community driven development (CDD) approach in a number of sectors: especially primary education, agriculture, and social protection. Investments with a CDD approach have been complemented by the implementation of programs aimed at strengthening the decentralization process so that decision-making can be brought to the Local Government level (District Council, Urban Council, Islands, and Village Council). Public sector reform strategies are also being supported in order to improve the efficiency of the public sector, complemented by a national privatization program aimed at mobilizing the private sector for poverty reduction goals.

2. Objectives

The development objective of TASAF II is to empower communities to access opportunities so that they can request, implement, and monitor the delivery of services through subprojects that contribute to improved livelihoods and are linked to the attainment of the associated MDGs indicators specified in the Tanzania NSGPR. The Bank and the Government have jointly decided that the text of the development objective should be reworded, without changing the spirit of the project, to read as follows: to improve access of beneficiary households to enhanced socio-economic services and income generating opportunities. The Additional Financing will have the same reworded objective as the original Project. The outcome indicators are: (i) improved access to basic socio-economic services; (ii) increased access to income generating opportunities in targeted districts; and (iii) improved quality of basic services.

The Project Objective is linked to the current Joint Assistance Strategy for Tanzania (JAST) (2007-2010) Report No. 38625 of March 2007. The JAST is aligned to the MKUKUTA of the GoT, which mainstreams the MDGs. The Social Protection Objective under MKUKUTA Cluster II particularly focuses on reaching the poorest and most vulnerable groups and on reducing inequalities across geographic, income, age, gender and other strata. The JAST also supports one of the five main goals of this cluster, namely, provision of adequate social protection and meeting the rights of the vulnerable and needy groups with basic needs and services. One way that the JAST addresses these issues is through its support for TASAF II and using the social protection initiatives that empower communities to access opportunities so that they can improve their livelihoods. Consistent with the JAST goals, the original Project and the Additional Financing serve the needs of households with limited access to and use of specified service packages, vulnerable individuals needing assistance and food insecure households with limited employment opportunities.

3. Rationale for Bank Involvement

The Government has requested the Bank for support to move the country towards food security in the light of the recent food and fuel price shocks that threatened the livelihoods of thousands of people. Food prices have remained above the five-year average and above last year’s prices, and continue to constrain household food access, particularly for those households which are highly dependent on markets for their food supply. As food prices begin to rise again, as is typical between September and January, poor market-dependent populations both in rural and urban areas face increasing pressure, particularly due to high transportation costs and general inflation (USAID/Famine Early Warning Systems Network, August 2008 Food Security Update). The Government has so far responded to the rising prices by allocating significantly higher budgets to enhance the access to and use of fertilizers and improved seeds by smallholder farmers in order to increase food production that might lead to some reduction in food prices. This initiative is implemented under the National Agricultural Input Voucher Scheme (NAIVS) in 53 districts that are high producers of food grains in the country. The scheme does not cover districts that do not produce much grain.

The Bank’s response is through a mix of instruments in the Accelerated Agriculture Food Security Program which includes: a stand-alone Emergency Recovery Loan to finance the immediate need to scale up famers’ access to inputs through NAIVS; (ii) Additional Financing for the Agriculture Sector Development Project to support rehabilitation of small scale irrigation investments; and, (iii) Additional Financing for TASAF II to scale up its public works and support to the vulnerable as the primary social protection intervention.

4. Description
The original Project has two components: (i) the National Village Fund (NVF), and (ii) the Capacity Enhancement (CE). The NVF uses the CDD approach and provides a mechanism that allows Local and Village Governments to provide social protection by responding to community demands for interventions that improve livelihoods. The management of a NVF requires the enhancement of capacities at National, Local and Village levels in the empowerment of communities to participate in risk reducing and mitigating activities thereby contributing to poverty reduction. Thus, the CE component is to facilitate the implementation of the NVF component.

Under the original Project the principal target group of the NVF are the poor, and access to the Fund is by communities who are considered poor because they: (i) are able-bodied but food insecure; (ii) are vulnerable (i.e., orphaned, disabled, elderly, affected/infected by HIV/AIDS, etc.); and (iii) lack access to basic social and market services. The Additional Financing will support only two of the beneficiary groups viz: (i) food insecure households with able-bodied adults who will increase their incomes from working in NVF-financed public works programs, and (ii) vulnerable individuals who will work through community-based organizations to access resources for increasing incomes at the household level. Hence the Additional Financing will scale up the achievement of the following outcomes under the NVF: (i) improved employment opportunities for individuals to meet basic needs; and (ii) increased cash and other benefits reaching vulnerable individuals. The associated outputs are: (i) individuals with increased and quantified employment opportunities and cash transfers through the subprojects; and (ii) vulnerable individuals receiving assistance from subprojects.

Under the CE component, beneficiaries will be the same as for the original Project viz: agencies (public and private) that support communities to make the best use of resources made available under the NVF. The CE component will respond to individuals from LGAs and various agencies supporting Village Governments, comprised of Village Councils and Village Assemblies, to implement subprojects. The Additional Financing will scale up the achievement of outcomes and outputs. The main outcomes will be extra skills in subproject cycle management gained by individuals, while the key outputs for the component are: individuals reached with capacity enhancement activities at Village, Ward, District/Municipal, and National levels.

The CE component will provide resources for project management, training, monitoring and evaluation of activities financed from the NVF component with the main output being the number of subprojects completed in a satisfactory manner.

The original Project adopted the Social Risk Management (SRM) approach to social protection by creating rules for households to access resources that can stimulate economic activities to allow poor households to increase their incomes, address issues of food security and vulnerability, and manage risks. Thus, the Additional Financing provides a multisectoral response to the needs of communities whose actions better prepare them to take advantage of market-created opportunities. Communities and sectors (represented at Ward and District/Municipal levels) are able to undertake activities that assist GoT meet its targets as laid out in the MKUKUTA – increasing incomes among the poor, tackling vulnerability, and increasing access to the market by the poor. The Additional Financing will also adopt the Social Risk Management approach following the original Project.

5. Financing Source: ($m.)

BORROWER/RECIPIENT 0

INTERNATIONAL DEVELOPMENT ASSOCIATION 30

IDA GRANT FOR POOREST COUNTRY 0

LOCAL COMMUNITIES 0

Total 30

6. Implementation
There are currently no other international agencies participating in the financing of TASAF II.
The institutional and implementation arrangements designed for the original Project will be used for the implementation of the Additional Financing.

7. Sustainability

The Minister of Finance wrote to the World Bank requesting a follow-up operation to TASAF I, and a high-level Government Project Preparation Team was set up to prepare TASAF II. This commitment to the Project was complemented by GoT’s commitment to policies contained in the MKUKUTA, and Government interest in the CDD approach as a way of empowering communities to participate in the implementation of the MKUKUTA. There is also commitment to decentralization below the LGA as a way of empowering communities, and this is demonstrated by constitutional provisions that recognize Village Government as the third sphere of governance (to complement National and Local levels). The GoT through TASAF has demonstrated the mainstreaming of the CDD approach and thereby ensuring sustainability.

Under the original Project, Local Government Authorities (LGAs) have the authority to reject any community subproject request where such an investment would be contrary to sector norms and standards, and/or are outside the LGA’s development plan. This ensures that only infrastructure where the LGA has sufficient recurrent budget is constructed. For the transfer of incomes to food-insecure households, those with vulnerable individuals, market mechanisms are used in the implementation (such as use of market minimum wages for determining the pay under public works). Capacity building budget is also provided for under the TASAF II project for ensuring that community level mechanisms for operation and maintenance are put in place. It is expected that the Additional Financing will go a long way in deepening the sustainability that is already in place in the targeted districts.

8. Safeguard Policies (including public consultation)

Environmental Assessment (OP/BP 4.01): This policy is triggered given the fact that each subproject will need to be evaluated to ascertain whether there will be any environmental impact. Mitigating measures will be included and costed in the subproject design. An Environmental and Social Management Framework (ESMF) is in place in order to provide a process and guidance for handling safeguard issues that may arise during the planning, review and approval of subprojects. The ESMF has been reviewed and cleared by Bank and disclosed in-country and at the Bank InfoShop.

Involuntary Resettlement (OP/BP 4.12): This policy is triggered given the possibility that some subprojects may involve infrastructure construction and land acquisition. Since the subprojects are not known or identified in advance, a Resettlement Policy Framework (RPF) has been prepared, reviewed and cleared by the Bank and disclosed in-country and at the Bank InfoShop.