UNITED REPUBLIC OF TANZANIAPRESIDENT’S OFFICE, PLANNING COMMISSION

THE TANZANIA FIVE YEAR DEVELOPMENT PLAN 2011/12-2015/2016

Unleashing Tanzania’s Latent Growth Potentials

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Use of the 5 Year Development Plan as an Instrument for Mainstreaming Sustainable Development Agenda

Presented to the International Workshop on Strengthening Planning and Implementation Capacities for Sustainable

Development in the Post Rio Context, Held at Incheon, Republic of Korea

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Paper prepared by:Clifford. K. Tandari,

Deputy Executive Secretary International Trade and Economic Relations, (on behalf of Executive Secretary – POPC)

P.O. Box 9242,DAR ES SALAAM.

Organised by the United Nations Office for Sustainable Development (UNOSD)14th - 16th November, 2012

PRESENTATION LAYOUT

1. The Five Years Development Plan (5YDP)2. Pillars of 5YDP3. Unleashing Growth4. Salient Features of the 5YDP5. Binding constraints6. Focus of the Plan7. Core Priorities8. Core Investments9. Linkage between MKUKUTA and 5 YDP10. Government Strategies on Poverty Alleviation11. Underscoring the PPPs12. Conclusion13. List of References

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What is the 5 Year Development Plan

Five year National Development Plan 2011/12 – 2015/16 is a blue print/document endorsed by the Government in 2011 for purposes of implementing the Development Vision 2025 for the period 2011/12 to 2015/2016.

The Plan indicates what to do in terms of mega-projects that are taken from various key sectors for purposes of unleashing growth potential.

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What are the Pillars of the Plan

• Making Tanzania the food basket of the region EAC, SADC and Grand FTA (EAC-COMESA-SADC).

• Making Tanzania the trade (transit) and logistics hub of the Great Lakes Region (ie. Rwanda, Burundi, DRC, Zambia, Malawi, Uganda, Northern Mozambique)

• Making use of ICT backbone for increased efficiency use of internet and mobile phone related services.

• Using a huge natural gas deposits in Mtwara, Lindi and Coast Region for increased Power Generation.

• Rehabilitation of The Central Railway line and increased wagons and locomotives as well as expansion of the Port of Dar es Salaam.

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Unleashing growth potential

In order for the Five Year Development Plan (5YDP) to be able to unleash growth the following factors are important to be in place:-

i.Large investment in Energy and Transport infrastructure; mega – projects;

ii.Strategic investments to expand the cotton industry, high value crops (horticulture, floriculture, vineyards), targeting maize and rice cultivation under SAGCOT for food self sufficiency and experts; fertilizer production tapping the large deposits of natural gas and phosphate Development of Special Economic Zones (SEZs) to foster manufacturing growth increase the number of factories of cement, as well as development of coal and steel industries;

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Unleashing growth ..

• Enhancing skills development especially in Gas – Oil sub-sector as well as key skills required to run the middle income economy.

• Improving drastically the Business Environment especially targeting the key indicators of doing business.

• Institutional reforms for an effective implementation, monitoring and evaluation of the plan.

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SALIENT FEATURES OF THE PLAN

The 5YDP streamlines various sectoral plans into a unified and coherent national plan. It is focused on:i.A shift from needs planning which is based on available resources to opportunity based planning;ii.Strong emphasis on implementation effectiveness;iii.Strong emphasis on growth;iv.High drive and scaling up of the role and participation of the private sector in economic growth, through strengthening business climate for effective use of factors of production.

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Binding constraints

• The 5YDP will be providing assures to the following identified constraints as per Tanzania – US Partnership for Growth Study:

• Lack of reliable and adequate supply of electricity;• Poor quality infrastructure – transport network – roads, railways,

ports;• Inadequate supply of skilled labour;• Limited Access to secure land rights;• Devastating impacts of climate change amidst scarce irrigation

facilities;• Limited value addition of primary products;• Lack of access to finance especially by SMEs and agriculture sector.

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The Plan will further focus on

a) Inclusive and broad based growth

b) Employment creation especially among youths

c) Competitiveness and Export development

d) Regional Integration (EAC, SADC, Grand EAC –

COMESA – SADC FTA)

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Core Priorities the Five Year Development Plan

1. Infrastructurea) Hard infrastructure

– Energy– Railways– Road Transport– Airports/Air Transport

b) Soft infrastructure» Science, Technology and innovation

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Core Priorities ..

2. Agriculture, Fisheries, Forestry

3 Industry, mining, manufacturing

4. Water and Sanitation

5. Human Capital Development and Social Services– Education and skills development– Health

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KEY PRIORITIES(i) Infrastructure

The biggest obstacle to growth is lack of sufficient infrastructure. Thus, the development and maintenance of infrastructure is essential for sustainable economic growth.The strategic interventions in this area are categorized into those that deal with hard and soft infrastructure. Interventions in the hard infrastructure focus on energy and transport sector investments by ensuring the availability of reliable transport infrastructure facilities that will reduce cost of doing business and promoting Tanzania as a reliable transport and logistics hub for EAC and central African countries and the Great Lakes Region.

Soft infrastructure basically focuses on ICT.13 13

(ii) Agriculture

The agricultural sector has backward and forward linkages with other sectors of the economy such as the industrial sector, transport, tourism sector and trade. Enhancing agricultural transformation is a critical goal for the realization of Vision 2025. Agricultural transformation should therefore include:Expand and improve irrigation infrastructureEnhance utilization of modern agricultural inputs and mechanization.Improve market access and Promote agro-processing and value addition activities.

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(iii) Industries

• Industries are market for agricultural products and provides abundant employment opportunities, especially among youths.

• The mining sector has the opportunity to contribute more in tax revenue to the production of energy. The government will increase local participation and beneficiation (Value addition)

Some of the measures to be undertaken include: Establishing Special Economic Zones (SEZs), in urban and

rural areas; Building industries using raw materials from agriculture

and value addition and provide services (ancillary services) in the mining sector

Increase the share of manufacturing in GDP and promote export of manufactured products. 15 15

(iv) Water and Sanitation

Water is one of the resources largely available in the country and offers great opportunities to increase productivity and growth.

Some of the strategies include:(a) Expanding the area for irrigation;(b) Ensuring adequate water for agricultural & industrial use;

(c) Supporting the production of electricity;

(d) Improving water services to urban & rural areas.

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(v) Human Resource Development

Human capital is the basis of the quality of human resources. A healthy workforce is essential for economic development.

Some measures include:– Investing more in educational infrastructure,

higher education and vocational training (training materials, etc.);

– Use the available skilled workforce better;– Facilitate access to health care for all people.

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Total cost of Tsh. 42.9 trillion (an average of Tsh. 8.6 trillion per year)

Government contribution is estimated at Tsh. 2.6 trillion per year. The remainder is expected to come from other sources like PPP's, private sector and development partners (DPs)

The share of Government will come from existing sources, but also new financing sources, including taxes on trade financing, Sovereign Bonds, taxes on the profits of mining companies, Sovereign Wealth Funds, Bilateral cooperation such as the Sino-Africa, India-Africa, TICAD etc.

FINANCING THE PLAN

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Core Investments within the Plan1. The core investments in the 5YDP are as follows:-2. Electricity generation to produce 2780 MW;3. Expansion of the capacity of the Dar es Salaam Port;4. Rehabilitation of the Central Railway line and beef up the rolling stock;5. Construction of regional and district roads in the SAGCOT;6. Countrywide coverage of ICT backborne infrastructure and increased

broadband network;7. Irrigation infrastructure in the SAGCOT;8. Training students in Science, Engineering and Education;9. Development of SEZs especially for Electronic goods, farm machinery and

agro-mineral processing and integrated textile industry;10. Large scale Fertilizer Production;11. Coal and Steel industry.

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Government Strategies on Poverty AlleviationThe principles guiding MKUKUTA II are:• National ownership (the people, Government, CSOs, Private

Sector);• Political commitment;• Commitment to stabilize macroeconomic variables, and accelerate

core reforms implementation, whereby the role of private sector in pro-poor economic growth is emphasized and given a central role;

• Macro-micro linkages;• Sector strategies, linkages and collaboration;• Local partnership and people’s participation and community

engagement;• Harmonized assistance;• Sustainable human development and equity;• Sharper and focused prioritization;

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MKUKUTA GOALS

• Pursuing sound macro-economic management;• Reducing income poverty through inclusive, sustainable,

and Employment enhancing growth and development;• Energy infrastructure• Water infrastructure for productive sector;• Transport infrastructure;• Ensuring creation and substance of productive and decent

employment, especially for women, youth and people with disabilities;

• Ensuring food and nutrition security and climate change adaptation and mitigation;

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MKUKUTA GOALS ..• Leveraging returns on national resources for enhanced growth;• Ensuring equitable access to quality early childhood, primary

and secondary education for all;• Ensuring expansion of quality technical and vocational

education higher education, adult, nonformula and continuing education;

• Improving surgical, health nutrition and well being;• Increasing access to affordable clean and safe water, sanitation

and hygiene;• Developing desert human settlements while sustaining

environmental quality;• Providing adequate social protection and rights to the

vulnerable.

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Underscoring the PPPs

• The National Public Private Partnership (PPP) Policy was adopted by the Government in November, 2009.

• Following that the PPP Act was passed in Parliament on 15th July 2010 and enacted by the Government on 6th August, 2010.

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The main objectives of the PPP policy

• The main objective is to promote private sector participations in the provision of resources for PPPs in terms of investment capital, managerial skills and technology specific objectives are:

• To develop an enabling legal and institutional framework to guide investments in PPPs;

• To implement effective strategy showing specific obligations and rights of various stakeholders;

• To introduce fair, equitable, transparent, competitive and cost effective procurement process for PPPs.

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The main objectives of the PPP policy …

• To attract resources for development of PPPs;• To develop institutional capacities for technical analysis and

negotiations of PPPs and associated contracts;• To enhance efficiency and quality in implementation of PPPs.

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The agenda involves

• Strengthening Public Private Partnerships (PPP) including formulation of an Institutional framework for public – private partnership in human capacity development.

• Financing from the private sector by making use of Public Private Partnerships (PPPs) as alternative source for financing long term development expenditure especially public infrastructure when the PPPs financing modality is in operational, it would complement other financing arrangements, thus reducing fiscal burden to the Government. Preparation of a fully articulated finance framework will be undertaken.

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AN EXAMPLE FOR PPP

• Promoting huge flagship investment projects under PPP arrangements such as Rehabilitation and construction of huge Ports, new Railways, Roads(for example construction of Road Toll user pay lanes in some areas of the City or some Highways for fast tracking Executives and Business executives who could be willing to pay so as to spend less travel time

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Mainstreaming Rio+20 outcomes

• The Rio + 20 Outcomes will further be incorporated into our planning system during the Midterm review of our 5YDP.

• Otherwise most of the concerns raised in Rio+20 outcomes are already taken on board in the 5YDP

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Green Economy

While trying to mainstream the Green Economy:• Are there indicators for measuring Green

Economy as we try to integrate;• Is Green Economy universally acceptable or is

it subject to adaptability;• What are some of the success stories and

best practices of GE that are documented;• What is new within GE

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GE

• Transition to the Green Economy requires capacity building, knowledge sharing, technology transfer, innovation as well as accreditation of National certifying bodies.

• Where is the extra funding that is going to build this capacity for poor developing states

like Tanzania

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National Plans and Strategies

• In Tanzania we will continue using our National Five Year Development Plans, National Strategies and Sector Strategies as a

means and instrument for operationalising the Sustainable Development agenda;

We shall ensure coherence, consistency and integration of SD issues into the National Development agenda and core priorities of the Plans.

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Way forward

• We further call for capacity building, knowledge sharing so as to scale up some of the good practices;

• We shall continue mainstreaming issues of sustainable development in our Development

planning and processes as they continue featuring; Our goal is to unleash the growth potential for

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Goal

• Our national goal is to unlock and unleash the growth potential so as to bring about rapid and massive economic growth that will build capacity for sustaining social service provision while being mindful of environmental concerns towards the common national vision

of becoming a poverty free society and middle income country by the year 2025.

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CONCLUSION Rio+20 for it to be effective it calls for

economic growth that will build capacity of poor countries to sustain and provide social services to its citizenry.

Finally, Tanzanian has mainstreamed most of the sustainable agenda items into the FYDP I as well as MKUKUTA plus sectoral plans and strategies for realising the development agenda as articulated into the the Development Agenda also known as Vision 2025.

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List of reference

• URT, Tanzania National Development Vision 2025• URT, The Tanzania Five Year Development Plan 2011/12 –

2015/16• URT, MKUKUTA I• URT, MKUKUTA II• URT, The Public Private Partnership (PPP) Policy• URT, The Public Private Partnership Act, 2010

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