The OPEC Fund for International Development fights against poverty by funding projects that improve poverty and spur development. On February 19, 2021, it continued this effort by sending a $50 million loan to Tanzania. The funding supports the Fourth Tanzania Poverty Reduction Project. The project intends to focus on boosting the economy through rural development. It will also improve access to social services for more than 900,000 people. Tanzania has certainly made progress in reducing poverty over the past decade, but around 26 million Tanzanians still live on less than $1.90 per day. The efforts of the OPEC Fund intend to address the issue of poverty in Tanzania.
The fourth phase of the plan aims to build rural infrastructure for education, health, water, agriculture and transportation. By improving these conditions, employment opportunities will arise for those who are struggling. Additionally, this project will provide people with income opportunities such as growing vegetables and farming animals. The OPEC Fund Director-General Dr. Abdulhamid Alkhalifa states that the organization has committed to improving poverty in Tanzania for years. He explains that the current loan will empower communities to help themselves by strengthening food resilience and household incomes as well as developing social amenities to encourage growth and development.
The partnership between the OPEC Fund and Tanzania has existed for 45 years. During the partnership, the OPEC Fund has given the country more than $370 million for the current project and 37 other public sector operations. The OPEC Fund most recently granted assistance toward transportation. Tanzania received $26 million for the Kazilambwa-Chagu Road Upgrading Project. The road built will connect two of the country’s main ports. Improving the accessibility of these ports will ultimately lead to an increase in both agricultural and tourism-related activities. Additionally, it will enable trade with neighboring countries, therefore spurring economic growth.
Plans for Development
The OPEC Fund’s mission is to stimulate economic growth in low to middle-income countries. The OPEC Fund provides financing to both member and non-member countries. Established by member countries in 1976, it sought to increase development and strengthen communities, all while empowering the people of the country. The OPEC Fund has approved more than $25 billion for 135 countries, showing many that development is possible for everyone. With help from the OPEC Fund, Tanzania has greatly reduced poverty levels over the past 10 years. As the OPEC Fund fights against poverty, the Tanzanian government is implementing programs to eradicate poverty and developmental issues. Exemplary programs include three previous phases of this project co-financed by the OPEC Fund.
Importance of Agriculture
Agriculture is the center of Tanzania’s economy, contributing around a quarter of GDP and employing three-fourths of the country. Increasing droughts and harvest losses, however, present a threat to food security and the agriculture sector. Tanzania’s GDP growth of 6–7% annually over the past decade stems largely from the agriculture sector. A majority of the agricultural success has come from improvements and progress in farming and harvesting.
Tanzania also struggles to expand modern energy access, with two-thirds of the population still without access to modern energy. Similarly, only 9% of Tanzania’s population has access to formal financial services and only 4% has ever received a loan from a bank, factors clearly stagnating economic growth and development in the country.
The assistance provided by the OPEC Fund alongside community members and the Tanzanian government has allowed Tanzania to make great strides toward eradicating poverty and improving developmental growth.
– Jai Phillips