The African Development Bank (AfDB) announced last month that it would support Tanzania’s economic transformation to inclusive and green growth through an indicative concessional resource assistance package estimated at more than $1.1-billion over a five-year period.

The support package is contained in the bank’s 2016–2020 Country Strategy Paper (CSP) for Tanzania, which will guide the bank’s operations in the country during the next five years. The CSP was approved by the AfDB’s board of directors last month in Abidjan, Côte d’Ivoire.

While commending Tanzania’s robust gross domestic product (GDP) growth, which has exceeded 6% since 2001, the board said future assistance would address the most pressing constraints to economic transformation and improve public-sector governance to ensure value for money in public spending.

The CSP has two complementary support pillars – infrastructure development for inclusive and green growth, and strengthening governance and accountability for improved competitiveness.

The first pillar emphasises support for transport and energy to promote domestic and regional transport connectivity and improved access to reliable, affordable and sustainable electricity.

The second pillar prioritises the strengthening of financial management and improving the enabling environment for private-sector investment and finance for sustainable job creation.

According to the CSP presented to the AfDB board, “investment interventions from the bank’s private-sector window will be complementary . . . aimed at improving enterprise access to finance . . . particularly businesses engaged in smallholder agriculture, agribusiness and related value chains. Nonlending operations will be targeted at providing capacity building, technical assistance and advisory services to improve domestic resources mobilisation and the negotiation of commercial transactions in the oil and gas sector”.

To effectively consolidate the AfDB’s contribution to Tanzania’s development, the CSP 2016–2020 introduces innovative infrastructure investments to transform operational regions into sustainable development corridors. It also mainstreams the bank’s 2013–2022 Ten Year Strategy priorities, such as inclusive and green growth, gender equality and empowerment. The CSP 2016–2020 also aligns with the High 5 Priorities – light up and power Africa, feed Africa, industrialise Africa, integrate Africa and improve the quality of life for Africans – and Tanzania’s social development goals.

The High 5 Priorities, which was launched in September last year, outlines the five priority areas that the AfDB will focus on to advance Africa’s transformative agenda over the next ten years.

Applying innovative financing instruments – such as local currency bonds and guarantees, which can be used to derisk lending to sectors like agriculture to augment the African Development Fund and the AfDB resources windows – also forms part of the package.

The CSP provides for a cumulative indicative concessional resource envelope of $1.1-billion from 2016 to 2020. Additional resources will be mobilised from the AfDB window, the Africa Growing Together Fund, trust funds, renewable-energy financing and cofinancing with other partners.

The bank’s portfolio in Tanzania comprises 29 operations, with a total net commitment of $1.97-billion as of November 30, 2015. The portfolio consists of 15 public-sector operations, four private-sector operations and ten multinational operations.

Infrastructure accounts for 65% of the value of the portfolio, with transport comprising 44%, water 16% and energy 5%. The social sector accounts for 5%, agriculture 3%, multisectors 4% and multinational operations 16%, of which 79% is in energy and transport. Private-sector operations account for 7% of the overall portfolio.

Board members underscored the need for Tanzanian authorities to ensure that the country’s high GDP growth delivered robust economic transformation, poverty reduction and improved livelihoods.