UNCDF has been present in Tanzania since 1982, promoting local economic development and financial inclusion, and enhancing local government alternative sources of funds to finance local infrastructure.
Earlier Programmes in Tanzania include the Support to Decentralization Programme (SDP) in Mwanza Region, and the Support to Good Local Governance Programme, in support of the Government’s decentralization efforts (1997-2003). Furthermore, in 2006 the government in partnership with UNCDF and UNDP developed a five-year second-generation program, Support to Local Economy in Mwanza (SLEM) and UNCDF also implemented its Gender Equitable Development (GELD) programme (2009-2012).
UNCDF offers “last mile” finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development.
UNCDF pursues innovative financing solutions through: (1) local development finance, which shows how fiscal decentralization, innovative municipal finance, and SMEs finance can drive public and private funding that underpins local economic expansion, women’s economic empowerment, climate adaptation, and sustainable development; (2) inclusive digital economies, which expands the opportunities for individuals, households, and micro, small and medium-sized enterprises to participate in the local economy, while also providing differentiated products for women and men so they can climb out of poverty and manage their financial lives.
In line with the UNCDF global strategy of Leaving No-One Behind in the Digital Area and the country’s UN Development Assistance Plan, UNCDF is supporting inclusive economies to help smallholder farmers, refugees and other vulnerable populations in rural Tanzania thrive. This includes contributing to refugee response initiatives, food security, food systems, livelihoods, financial inclusion and Tanzanian fintech space; last but not least, social cohesion.
This programme UNCDF uses a market development approach that is rooted on five decades of fostering financial inclusion and local development, digital economies and partnerships for the Sustainable Development Goals, digital and financial literacy, as well as reaching the most underserved populations by promoting community-based frugal innovation as well as strengthening savings and production groups.
The Local Finance Initiative (LFI) is a UNCDF global programme and an investment mechanism that enables developing countries to unlock the flow of domestic capital to invest in sustainable development. LFI mechanism (Catalytic Capital + Technical Assistance + Risk Mitigation Strategies) has been proven that transformative local development investments can tap into additional capital from both public sector and domestic capital markets. The facilitation by LFI, is a way of making public funding to go further, and the private sector - who are traditionally reluctant to invest in risky investment projects to come in – and could benefit from new opportunities.
Tanzania’s urban population is expected to reach 60 million by 2050 from an estimated 20 million in 2018. This rapid urbanization has incentivized UNCDF to pilot its Municipal Investment Financing (MIF) programme and to develop financing instruments, such as Public Private Partnerships and Municipal Bonds, that diversify and aggregate local governments and municipalities’ financial base beyond annual grants provided by the central government.
The Inclusive and Equitable Local Development (IELD) programme supports governments and the private sector at the local level to design, plan, implement and sustain local, public and private investments with a particular emphasis on unlocking domestic capital for women’s economic empowerment and entrepreneurship.
More than 80% of Tanzania’s population is heavily dependent on its environmental and natural resources for income generation. The Local Climate Adaptive Living (LoCAL) serves as a mechanism to integrate climate change adaption into local governments’ planning and budgeting systems, increase awareness of and response to climate change at the local level, and increase the amount of finance available to local governments for climate change adaption.