[{"bbox": [72, 148, 687, 179], "category": "Section-header", "text": "# 4. IMPLEMENTATION ARRANGEMENTS"}, {"bbox": [109, 210, 391, 239], "category": "Section-header", "text": "## 4.1. Financing Agreement"}, {"bbox": [84, 254, 1077, 280], "category": "Text", "text": "In order to implement this action, it is envisaged to conclude a financing agreement with the partner country."}, {"bbox": [109, 299, 519, 329], "category": "Section-header", "text": "## 4.2. Indicative Implementation Period"}, {"bbox": [84, 343, 1145, 423], "category": "Text", "text": "The indicative operational implementation period of this action, during which the activities described in section 3. will be carried out and the corresponding contracts and agreements implemented, is 48 months from the date of entry into force of the financing agreement."}, {"bbox": [84, 423, 1145, 475], "category": "Text", "text": "Extensions of the implementation period may be agreed by the Commission's responsible authorising officer by amending this Financing Decision and the relevant contracts and agreements."}, {"bbox": [109, 511, 710, 541], "category": "Section-header", "text": "## 4.3. Implementation of the Budget Support Component"}, {"bbox": [123, 555, 778, 583], "category": "Section-header", "text": "### 4.3.1. Rationale for the Amounts Allocated to Budget Support"}, {"bbox": [84, 593, 1145, 673], "category": "Text", "text": "The amount allocated for the budget support component is EUR 28,000,000, and for complementary support is EUR 47,000,000. This amount is based on lessons learned from previous and ongoing budget support operations and on the Government's financing needs to implement policy priorities."}, {"bbox": [84, 678, 1145, 838], "category": "Text", "text": "In general, budget support is complementary to other implementation modalities in this action and adds value by allowing for a high-level results oriented policy dialogue between the EU, Ministry of Finance and Planning, PO-RALG and respective city councils. Thus, bringing different stakeholders together to discuss ongoing reforms in national systems and local administrations that facilitate the implementation of Tanzania's urbanisation agenda. It also incentivizes continued improvements in the national public finance management system and budget transparency."}, {"bbox": [84, 843, 1145, 1083], "category": "Text", "text": "Given the recent positive developments in the country, the use of budget support seems particularly timely and relevant. There is a real opportunity to build on this political momentum to support the renewal of a close political dialogue with the country's national authorities. Moreover, budget support is the government's preferred implementation modality. During the six years of general budget support preceding the ongoing programmes, the Government had an absorption capacity of 96% out of 300 million euros. The absorption capacity for the recently concluded economic and fiscal governance programme is 88% out of 200 million euro. Informed by this change in track-record, this action opts for a different approach: a smaller, focussed sector reform and performance contract, where budget support blends with other modalities and is highly complementary to drive a specific set of reforms that require cooperation of different government actors."}, {"bbox": [84, 1088, 1145, 1328], "category": "Text", "text": "The Government has made progress in its intention to reduce aid dependency, but is still counting on a substantial aid financing of TSH 2.9 trillion (approx. EUR 1.06 billion) for its 2021/22 budget. This represents 8% of total expenditure (estimated at TSH 34.88 trillion) and 22% of development expenditures (estimated at TSH 12.9 trillion). The combined EU budget support allocation in FY2021/22 will be 56.17 million euros (approx. 151 billion TSH), and consist of EUR 7 million to be paid through the proposed cities action, 7 million EUR through the proposed gender action, 7 million EUR through the proposed digitalisation action, 20.17 for the Covid-19 tranche of the Economic and Fiscal Governance programme and the next tranche of EUR 15 million of road sector budget support. This constitutes 0.43% of the total budget, 0.58% of domestic revenues and 5.2% of the budgeted grants from development partners, and therefore does not create disproportionate aid dependency."}, {"bbox": [84, 1333, 1145, 1413], "category": "Text", "text": "Besides, with 75% of the total amount linked to variable tranches, the programme is totally in line with the Commissioner's new recommendations that at least 70% of the amount of budget support operations should be linked to variable tranches, guaranteeing that performance is rewarded while strengthening our political dialogue."}, {"bbox": [138, 1430, 669, 1459], "category": "Section-header", "text": "### 4.3.2. Criteria for Disbursement of Budget Support"}, {"bbox": [84, 1468, 215, 1493], "category": "Text", "text": "#### a) Conditions."}, {"bbox": [84, 1494, 726, 1519], "category": "Text", "text": "The general conditions for disbursement of all tranches are as follows:"}, {"bbox": [135, 1520, 1145, 1573], "category": "List-item", "text": "- Satisfactory progress in the implementation of the Regional and Local Government Strengthening plan and continued credibility and relevance thereof or of the subsequent policy."}, {"bbox": [135, 1574, 1145, 1627], "category": "List-item", "text": "- Maintenance of a credible and relevant stability-oriented macroeconomic policy or progress made towards restoring key balances."}, {"bbox": [1041, 1662, 1157, 1685], "category": "Page-footer", "text": "Page 22 of 30"}]