Highlights

The two country strategies (FY 2012–15 and FY18–22) were consistent with Tanzania’s development objectives and the World Bank’s analytic underpinnings.

World Bank Group support achieved positive outcomes in supporting energy access and providing transport, health, and education services but had limited success in increasing productivity, commercializing agriculture, improving the business environment, and advancing financial intermediation.

The International Finance Corporation had successful advisory services in developing mobile money and improving credit reporting, but investments did not achieve their objectives, particularly in mining, microfinance, and commercial and noncommercial banking.

The World Bank faced significant implementation challenges, some of which were eased by the switch from investment project financing to Program-for-Results. More selective programming, simpler project design, and greater focus on building stakeholder capacity could also help portfolio performance.

The World Bank was slow to redesign an education engagement to account for a federal policy banning pregnant girls from public schools, indicating the importance of continuously maintaining partnerships in situations of complex and evolving political economy.

Bank Group support aligned with Tanzania’s development needs and achieved notable results, even though it faced implementation challenges and sometimes did not fully align with the government’s policies. The Bank Group’s strategy aligned with government priorities during the first half of the evaluation period, but overly complex designs and low client capacity undermined the portfolio’s effectiveness. Changes in the policy directions of the new government in Tanzania in the second half of the evaluation period disrupted the Bank Group’s programming and undercut the portfolio’s performance. This chapter starts by assessing the Bank Group’s strategies during the evaluation period. It then evaluates the effectiveness of the Bank Group portfolio and concludes with analyzing how the World Bank adjusted its lending instruments in response to changes in the implementation environment.

The Bank Group’s two country strategies during the evaluation period were grounded in World Bank core diagnostics and aligned well with the government’s development vision. The FY12–15 Country Assistance Strategy (CAS) built on World Bank analytic work, such as core diagnostics on poverty and growth, Public Expenditure Reviews, the 2009 Investment Climate Assessment, the 2010 Education Public Expenditure Tracking Survey, and Health Sector Performance Profile Reports. It also took into account the 2010 government strategy’s three priority areas: (i) growth and poverty reduction, (ii) improvement of quality of life and social well-being, and (iii) good governance and accountability.1 The high-level objectives of the FY18–22 Country Partnership Framework (CPF) were aligned with Tanzania’s Development Vision 2021, which focused on industrialization, human development, and public sector reforms.

The Bank Group adjusted its country strategies based on its own learning and changing government preferences but left a one-year gap in its coverage. Figure 2.1 (page 12) shows how the Bank Group’s strategy evolved. For example, under the first strategy (FY12–15 CAS), the Bank Group’s attention to education focused on primary and secondary access and quality. The 2017 Systematic Country Diagnostic highlighted the lack of skills of the labor force as a key constraint to jobs and poverty reduction, in line with the new government’s focus on developing national industry. Hence, the second strategy (FY18–22 CPF) paid particular attention to supporting job-relevant labor force skills by strengthening the labor market alignment of higher education programs. Another example is energy, where both strategies identified access to electricity as a development priority: the CAS included both investments and policy reforms, mostly to support private sector generation and the financial sustainability of the sector, whereas the CPF focused on public infrastructure investments given the new government’s preferences. Yet the strategy coverage did not include FY17,2 the year in which the World Bank committed more than $1 billion.

The Evolution of the World Bank Group Portfolio

The Bank Group portfolio in Tanzania reached approximately $8 billion over the evaluation period, making Tanzania one of the largest borrowers. During FY12–22, the World Bank alone approved 51 lending operations totaling $7.5 billion in new commitments. New International Finance Corporation (IFC) investments amounted to $463 million, and the Multilateral Investment Guarantee Agency issued one political risk guarantee in the amount of $29 million (table 2.1). By the end of the period, Tanzania was the seventh-largest borrower from the World Bank in Sub-Saharan Africa, after the Democratic Republic of Congo, Ethiopia, Kenya, Niger, Nigeria, and Uganda.

Source: World Bank Business Intelligence (as of December 11, 2023).

Note: AS = advisory services; DPF = development policy financing; IFC = International Finance Corporation; IPF = investment project financing; MIGA = Multilateral Investment Guarantee Agency; PforR = Program-for-Results.

Figure 2.1. Evolution of World Bank Group Engagement During the Evaluation Period, FY12–22

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Figure 2.1. Evolution of World Bank Group Engagement During the Evaluation Period, FY12–22

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Source: Independent Evaluation Group.

Note: CAS = Country Assistance Strategy; CPF = Country Partnership Framework; ECD = early childhood development; ICT = information and communication technology; MSMEs = micro, small, and medium enterprises; SCD = Systematic Country Diagnostic.

Much of Bank Group support during the evaluation period was concentrated in infrastructure, human development, public administration, and access to finance. World Bank support focused on transport, education, and public expenditure management, whereas IFC focused on access to credit. In the first strategy period, investment project financing commitments reached almost $1.8 billion, increasing to 3.3 billion in the second period (figure 2.2, panel a). Toward the end of the second strategy period, the impact of the COVID-19 pandemic shifted the World Bank’s priorities toward health care, safety nets, and emergency response (box 2.1). Development policy financing focused primarily on domestic revenue administration, public expenditure management, and public investment management (figure 2.2, panel b). All development policy financing was approved during the first strategy period. IFC supported the increase of credit to small and medium enterprises (SMEs), long-term financing to SMEs, and some support to mineral exploration. The Multilateral Investment Guarantee Agency issued one political risk guarantee to an agribusiness company in 2014.

Figure 2.2. World Bank Lending Commitments and Share of Prior Actions, by Sector and Instruments, FY12–22

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Figure 2.2. World Bank Lending Commitments and Share of Prior Actions, by Sector and Instruments, FY12–22

Source: World Bank Business Intelligence (as of December 11, 2023).

Note: DPF = development policy financing; IPF = investment project financing; PforR = Program-for-Results.

During the evaluation period, the Bank Group was the largest development partner in Tanzania. During 2011–22, the Bank Group accounted for approximately 30 percent of total development partner commitments, followed by the United States and the African Development Bank, including the African Development Fund (table 2.2). For example, it took a leading role in education support, contributing 58 percent of sector support. In financial and private sector support, the Bank Group contributed 68 percent. The World Bank was also a major supporter of public sector reforms, with 38 percent of total sector commitment, followed by the European Union.

To address implementation challenges, the World Bank increasingly included Program-for-Results (PforR) in its portfolio mix during the evaluation period. The World Bank included PforR as the lending instrument of choice for programs with significant development partner cofinancing and that involved a mix of service delivery and sector reforms. This encouraged the use of country systems by development partners and helped overcome implementation challenges related to capacity limits. The PforR portfolio grew by 27 percent during FY12–15, while the investment project financing portfolio dropped to 54 percent from 69 percent in FY07–11. The FY18–22 CPF recognized that Tanzania had used the PforR instrument well in the urban, energy, health, education, and water sectors and left its portfolio substantially unchanged in the second strategy period.

Source: Organisation for Economic Co-operation and Development Creditor Reporting System Aid Activity (database), International Development Statistics (accessed May 28, 2024).

Note: The data refer to calendar years and exclude aid from China. For internal validity of the analysis, World Bank Group commitment figures reported to the Organisation for Economic Co-operation and Development Creditor Reporting System differ from the commitments extracted from internal World Bank Group operations data systems as reported elsewhere in this evaluation. Commitment figures for the Bank Group are presented as reported in the Organisation for Economic Co-operation and Development Creditor Reporting System for comparability purpose and cannot be compared with the portfolio data elsewhere. EU = European Union.

Over the evaluation period, the World Bank reduced the number of investment projects based on Independent Evaluation Group (IEG) recommendations and lessons learned from previous operations. IEG’s 2018 Completion and Learning Review Validation (CLRV) and the FY18–22 CPF note the importance of selectivity in areas with strong government demand and where there was strong potential for achieving development results based on the World Bank’s comparative advantage, while emphasizing the need to coordinate with other development partners (World Bank 2018a, 2018b).3 The CLRV of the first strategy period (FY12–15) also pointed to slow program implementation because of complex fiduciary and reporting requirements and lack of capacity by sector ministries that are dealing with multiple lending instruments. The World Bank operationalized these lessons in the second strategy period by approving more focused and targeted operations compared with the first strategy period, as manifested by the reduction in the number of investment project financing and development policy operations (DPOs) from 37 to 14 associated with the increase in total commitments from $3.3 billion to $4.1 billion.

World Bank Group Effectiveness

In its two CLRVs that cover the evaluation period, IEG rated the overall development outcome of both strategy periods (FY12–15 and FY18–22) as moderately unsatisfactory. In the first strategy period, Bank Group support focused on two areas: (i) job creation by improving the business environment and facilitating financial intermediation and (ii) extreme poverty reduction by improving the quality and delivery of infrastructure services. The first area was rated moderately unsatisfactory because most of the objectives (five) were partially achieved or not achieved. The second area was similarly rated moderately unsatisfactory because the support to safety nets and public management did not meet their targets (table 2.3). In the second part of the evaluation period, Bank Group support focused on three areas: (i) enhancing productivity and accelerating equitable and sustainable growth, (ii) boosting human capital and social inclusion, and (iii) modernizing and improving the efficiency of public institutions. The first area was rated unsatisfactory, with most of the objectives rated not achieved or partially achieved. The second area was rated moderately satisfactory because most of the objectives were achieved or mostly achieved. The third area was rated moderately unsatisfactory because only marginal progress was achieved in improving the efficiency of the public sector (table 2.3).

Sources: World Bank 2018b, 2024b.

Note: ICT = information and communication technology; IEG = Independent Evaluation Group; MSMEs = micro, small, and medium enterprises.

Bank Group support to improve the business environment and financial intermediation throughout the evaluation period only partially achieved its objectives. Support for improving the business environment included facilitating business start-ups, customs and tax reforms, and access to market. These efforts partially achieved their intended objectives. The number of days to start a business improved only marginally from 29 in 2011 to 26 in 2016 but then deteriorated to 30 in 2020, below the target reduction of 10 days. In access to finance, there was only partial progress on increasing the proportion of adults using financial services and SMEs with increased access to credit. Similarly, the continued support to labor-intensive industries such as the agriculture and agribusiness sectors fell short of achieving its objectives, with negligible progress on yields and little verifiable evidence on agricultural commercialization. Some progress was achieved during the evaluation period in mobile finance, availability of financial products, and credit information services. IFC was successful in supporting the development of mobile money and the enhancement of the country’s credit reporting system. In credit reporting, notwithstanding a reduction of funding commitment by the government, IFC was successful in incorporating microfinance institutions into the credit bureau system, via reporting directly to the credit bureaus rather than going through the Databank. Over time, microfinance institutions increased from a reported baseline of 22 to 40 at completion, with an estimated 110 banks and microfinance and other institutions reportedly using the credit bureaus for sharing credit information. Since then, more than 6 percent of the adult population in Tanzania has become part of the credit bureau information system, from a baseline of 0 percent. As of 2020, participation levels had reportedly increased to 11 percent, indicating sustained progress.

Bank Group support contributed to improvements in the provision of infrastructure services, particularly energy and roads, but sustainability is at risk. The Bank Group recognized the importance of natural resources management, especially in the power and gas sectors, by providing support to this sector throughout the evaluation period. Good progress was achieved on access to electricity (and less so on sector sustainability), as demonstrated by the significant reduction of enterprises complaining about access to energy, although the lack of government support led to the cancellation of energy projects in the second strategy period. The Power and Gas Sector DPO series was aligned with the government strategies but lost relevance over time because of waning political support by the government. The lack of government ownership led to the cancellation of the third DPO and failure to achieve key outcome targets, particularly in promoting private sector involvement in power projects. Similarly, complex design and overly ambitious objectives led to the unsatisfactory performance of the Energy Sector Capacity Building Project. Some progress was achieved in developing the natural gas sector, but the project fell short in developing public-private partnerships for power generation because of delays in project implementation, caused by coordination issues and ineffective procurement activities. With World Bank support, public transport registered progress, with about 840,000 people having access to improved public transport by July 2016, exceeding the target of 543,721 (World Bank 2018b), and 15 percent of Dar es Salaam residents having access to the city’s rapid transit system. Progress was also made in road transport, with 86 percent of roads in good and fair condition in 2017, well above the target of 70 percent (World Bank 2018b), resulting in reduced travel times and savings estimated at $0.02 per kilometer for cars and $0.41 per kilometer for large buses (World Bank 2021e). No progress was made on rural transport, with sustainability remaining at risk because of insufficient funding for road maintenance.

World Bank support helped Tanzania make good progress in improving education and health services. At the beginning of the review period, the primary concerns in the education sector were low access and low-quality outcomes at the primary and secondary levels. In response to these constraints, World Bank support focused on both areas of access and quality, as well as on skills development to improve the employability and productivity of the labor force. With the contribution of the World Bank, there was good progress on access and quality indicators, and IEG rated this objective as achieved in both strategy periods. During the review period, World Bank support contributed to an increase in gross enrollment ratios at the primary level from 57 percent to 88 percent between 2014–15 and 2019–20. At the lower secondary level, gross enrollment ratios rose from 68 percent to 90 percent over the same period. The percentage of students achieving grade 2 minimum numeracy increased from 8.2 percent in 2013 to 17.1 percent in 2019 (against the target of 17.1 percent). The targets for skills development were also met by satisfactorily strengthening the institutional capacity of Tanzania’s skills development system, which resulted in an estimated 80 percent employability of short-term students one year after graduation, exceeding the 45 percent target. In the health sector, World Bank support aimed to improve equity in access and use of basic services while also improving service quality. World Bank support contributed to improving access and use of basic health services, but there were challenges in achieving equity and enhancing service quality. Progress was achieved in the proportion of attended deliveries at health facilities, which increased from 49 percent in 2013 to 85 percent in 2018 (Maternal and Reproductive Health in Tanzania Program; CDC 2023), and in the reduction in maternal mortality ratio, which dropped from 394 per 100,000 in 2012 to 238 per 100,000 in 2020 (World Bank Group 2020). Postnatal care increased from 51 percent in 2015 to 74 percent in 2020, and the percentage of women of reproductive age using modern family planning methods increased from 37 percent in 2015 to 42 percent between 2015 and 2020 (World Bank 2022c). Yet, while improvements were observed in the regions with problematic access, such as Mara, Mwanza, and Shinyanga, the support fell short of achieving its targets for delivery at health facilities and antenatal care coverage, and the goal of reducing the ratio of the best-performing to worst-performing local government authorities was achieved only for one indicator, indicating a modest outcome in enhancing equity. This objective was rated as mostly achieved and achieved in the two strategy periods, respectively.

The World Bank supported public sector reforms throughout the evaluation period but did not achieve its objectives because of weak subnational capacity and government ownership. In the first part of the evaluation period, the World Bank’s strategy emphasized the importance of shifting public sector management from the central to the local level to ensure that instruments designed to strengthen these systems were applied in public service delivery. In the second period, the reforms aimed at modernizing and improving the efficiency of public institutions. These objectives were not achieved in the first period and were partially achieved in the second. For example, the return on investment for minority-interest state-owned enterprises grew from 6.6 percent in 2018–19 to 9.8 percent in 2019–20. Although public institutions are now better connected to broadband services, efforts at strengthening public accountability and financial efficiency in delivering services achieved only partial success, mainly by marginally improving the predictability of the budget and expanding the use of e-procurement in most national and local government spending units. A legal framework for access to information was partly established, but no open data system was put in place, and processes outlined in the public investment manual were not implemented. The average return to state-owned enterprises is not published, and no progress was made in creating a level playing field between the public and the private sector to crowd in private investment. The World Bank’s effectiveness was hindered by low government capacity and lack of government ownership, highlighting the importance of assessing the country’s political context to better develop coalitions for change in challenging reform areas.

The World Bank’s lack of a selective approach to lending undermined long-term outcomes. While the Bank Group achieved some improvements in access to electricity, progress was limited in agriculture, financial intermediation, and the business environment. Similarly, advancements were achieved in education and health but not in public management efficiency. Lessons drawn from closed projects underscore the importance of geographically targeted interventions and activities, robust monitoring and evaluation systems, and alignment with local capacities and political economy constraints. For DPOs, this targeted approach has been shown to yield more tangible outcomes compared with broader initiatives, as presented in the Implementation Completion and Results Report Review (ICRR) for the Poverty Reduction Support Credit 9–11 series.

IFC investments did not achieve their targets. Evaluated IFC investments during the period yielded substandard development outcomes, with three rated as mostly unsuccessful (in commercial and noncommercial banking and finance), three deemed unsuccessful (in microfinance and mining), and one rated highly unsuccessful. Several factors contributed to this outcome. These include the unsatisfactory performance for the indicators adopted and the lack of evidence to identify IFC’s contribution to local SME sector. For example, profitability in one investment increased from 8.7 percent in 2011 to 1.9 percent in 2016 and then shrank by 5.4 percent in 2017. Similarly, the number and volume of loans fell short of targets, with loan volume reaching 90 percent of projections as of 2016 but 35 percent in terms of the number of borrowers for the same year. In mining, the inability to complete the bankable feasibility study led to failure in demonstrating the commercial viability and bankability of mines. Despite this, most investments had satisfactory private sector development and IFC investment outcomes.

Adaptation in a Changing Environment

Tanzania’s political economy influenced the Bank Group’s engagement after the 2015 election. For example, changing political priorities affected several programmatic DPO series intended to focus on the government’s reform priorities. In the power sector, lessons learned from the CLRV and the Project Performance Assessment Report for the Poverty Reduction Support Credit series on understanding of political economy and simplicity of design were only partially incorporated into the design of the new DPO series—the ICRR for the first and second Power and Gas Sector DPOs (in 2018) focused on private sector participation in the energy sector.4 Although the Bank Group recognized and addressed various risks to operating in Tanzania (such as flexibility and selectivity), political economy risks to the sector DPO series were insufficiently conceded and, together with design risks, had an adverse impact on program outcomes.

In 2002, Tanzania enacted a policy of expelling pregnant girls from public schools, which was implemented by the new administration during the evaluation period. Tanzania’s ban included the practice of requiring girls to take pregnancy tests at schools and expelling them if they were pregnant, both before and during the evaluation period.5 Approximately 5,459 girls were affected by this policy annually (World Bank 2024c). At that time, a World Bank education project gave limited attention to resolving gender disparities in education. It was mostly focused on improving school infrastructure and teaching quality. It included a disbursement-linked indicator to incentivize the Ministry of Education, Science, and Technology to increase the number of girls enrolled in form 5 in government schools.6 Despite growing domestic and international concerns, the World Bank designed a secondary education project with no options for helping pregnant girls reenter school, and the document only noted a need to reduce girls’ dropout rates in general.7 The World Bank submitted the original project design to the Board in 2018 but withdrew it shortly thereafter to redesign the gender dimensions of the project amid stakeholders’ concerns.

The redesign of the secondary education project included a deeper focus on gender issues in education and identified alternative education pathways (AEPs) as a way forward for helping pregnant girls and mothers reenter school. As part of this process, the World Bank carried out a gender assessment by conducting focus groups with teachers and school-age girls engaging with civil society organizations that provided educational programming for girls. The analysis also examined educational disparities. As a result, the redesigned Tanzania Secondary Education Quality Improvement Project included a component on gender with several gender-smart solutions, such as a special grievance redress mechanism, safe school training, guidance counseling, and support for safe passage to and from school to lower the risk of gender-based violence. The Ministry of Education, Science, and Technology embraced the AEPs to address preexisting dropout issues and strengthen the quality of the country’s alternative education centers. As a result, project monitoring showed that the AEPs reached 3,616 female students during 2020–24. A total of 71 percent of enrolled female students completed form 4, whereas 13 percent of them subsequently enrolled in form 5 (World Bank 2023c). Project monitoring also showed that the majority of mothers chose to return to the alternate schools rather than to secondary schools, indicative of both the viability of the AEPs and additional barriers for the mothers to return.

The World Bank worked with a range of local and international partners to support policy dialogue with the government to reverse the pregnancy ban in 2021. The World Bank, the United States Agency for International Development, the Foreign, Commonwealth & Development Office, and the Swedish International Development Cooperation Agency continued their efforts to convince the government to reverse the ban but were initially unsuccessful. Development partners and civil society organizations continued to create space for high-level discussions with the government on the ban. In 2019, the World Bank demonstrated to the government that allowing pregnant girls to stay in school produced tangible benefits and indicated that the ban risked the cancellation of a pipeline of primary education operations, as it would reduce outcomes. In 2021, the government reversed the ban. The World Bank has since engaged with the government, using its experience from Sierra Leone,8 to help design a reentry policy for pregnant girls. The World Bank, the United Nations Children’s Fund, and the Ministry of Education, Science, and Technology expressed interest in conducting a full assessment of the AEP policy’s viability in the future.