Global Policy Forum

Expectations by Tanzania to be admitted in the Heavily Indebted Poor Countries (HIPC) Initiatives, has been turned down after the donor community, mainly the IMF and the World Bank, disqualified it, partly due poor performance in economic reform. Issued recently the IMF survey report reveal that Tanzania will not be admitted in the HIPC debt relief arrangement as it was expected. The IMF had late last year said that preliminary assessment indicated that Tanzania could qualify to be admitted in the program which was scheduled next month.

The Tanzania's World Bank country director, James Adams had once said that Tanzania was to benefit from the debt relief under the HIPCs program. The money could then be used to fund health and education. Tanzania external debt stands at around USD 8 billion. It spends about 40 percent of the budget to pay foreign debts which is more than half it spends on health and education services combined.

In the financial year that ended last June, Tanzania spent USD 16.325 billion a part of external debt, but could afford only USD 38.625 million for the entire budget. According to financial analysts, this implies a high level of dependency on foreign assistance, which in the light of the global decline in aid levels, it leaves Tanzania is a very difficult position.

Various reports cite the example of Tanzania as where debt payment has resulted in under-funding of the health sector. The government fails to provide enough budget for immunization, equipment and essential drug kits.

It points out that in some hospitals, drug kits from the government last only for four days a month, and, in number of districts, is able to supply immunization vaccines to district hospitals only. District administrations have found themselves unable to transport the vaccines to villages, and communities are asked to contribute to the cost of kerosene that is required for running refrigerators used to preserve the vaccines.

FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.