This is the final project for finance for development course.

1. Unlocking financing opportunities: A case of Tanzania
By Mwanjaa Lyezia
Tanzania is among the least developing countries with the population of more than 50 million. In
my view, in order for Tanzania to finance its development it needs to use domestic resources
mobilization (DRM). For most countries, DRM is the largest resources available to fund the
national development plans. A country’s ability to mobilize domestic resources and spend them
effectively lies at the crux of financing development.
Effective domestic public policy helps increase equity through poverty eradication, providing
public goods and services and managing macroeconomic stability. It also reinforces a country’s
ownership of public policies, reduces aid dependency and raise creditworthiness. A strategy to
strengthen DRM should focus on mutually reinforcing stronger administrations, simpler revenue
systems, and collective actions to address internal tax issues, evasion and avoidance more
widely.
DRM is a path for developing countries like Tanzania to fully fund their development and end
foreign assistance. Besides allowing a government to pay for important social services and
infrastructures it will also strengthen people’s faith in its ability to provide accountable and
transparent government. DRM can be enhanced by combating corruption on which this can be
achieved by ensuring that there is effective law enforcement that ensure corrupt are punished.
Focus on reforms to improve financial management and strengthening the role of monitoring and
supervision. Also government should promote transparency and easy access to information.
Further, citizens should be empowered to hold government accountable in order to build mutual
trust between citizens and government.
To attract investment and help companies and people prosper, governments need support in
improving their tax systems and public expenditure management to get more accountable,
rebuild trust and increase future domestic resources. For instance in Tanzania, the World Bank
Group is trying to see how they can use public resources to bring in the private sector to create a
win-win situation for the benefit of citizens.
The Bus Rapid Transit (BRT) is a great example on how strategic government investments and
great outcomes for the people. The BRT reduced the round-trip travel time by 90 minutes a day,
and also the bus companies pays taxes to the government. The Ubungo interchange project is the
next step. This is the project financed by the government of Tanzania and the World Bank Group
and over the next 3 years Tanzania will be able to access an estimate $ 2.4 billion in concessional
financing.
Countries develop by leveraging global knowledge, building strong Public- Private Partnerships
and implementing strong policy and institutional reforms. In Tanzania for instance, the fifth
government led by president Magufuli have eliminated wasteful government spending, while

2. scaling up investment in infrastructure and rightly investing in education. Moreover, the increase
in domestic resource mobilization went up to 14.4 percent. Tanzanians have aspirations of
becoming a middle income country and this can be achieved by effective use of public finance
and domestic resources.
In order for the government of Tanzania to attract more investments must improve the regulatory
environment by minimizing bureaucracy and increase transparency. Private finance to support
sustainable development and job creation is very much needed. Also government must invest in
governance to enhance a return to stability.
The ongoing countrywide crackdown on public sector corruption and tax evasion are meant to
attract local and foreign investors towards contributing to the building of an industrialized
economy. According to the Tanzania Finance and Planning minister so far the move towards
industrialization is going well following government interventions to improve the investment
environment through scaling up infrastructure and power supply. Other big government
interventions that have been highlighted such as a review of business regulations, removal of
some taxes, and introduction of skills development programmes to enable the youth get jobs in
targeted industries such as textiles, leather and agro processing.
Further, for the country like Tanzania private sector is the fundamental strength of development
as it is an engine of progress to the economy in its entirety which is reflected in the creation of
employment, foreign exchange earnings, conservation of the environment, food security and as a
supplier of primary produce , inputs and services to other sectors.
To conclude multilateral and bilateral donors help developing countries like Tanzania to grow
their economies which is essential to domestic resources mobilization. Donors directly promote
both stronger domestic resources mobilization and more transparent, taxpayer-friendly business
environments by providing technical assistance, capacity building, and commodities in the areas
of tax and customs policy and administration.
As Tanzanians we have to ensure that sustainable development goals are achieved as they will
need a more ambitious financing for development strategy that can mobilize much more Public-
Private Partnerships in order to have an impact.