Closed Compact Report: Tanzania Compact | November 2015

Transportation Sector Project

  • $372,776,000Original Compact Project Amount
  • $405,402,512Total Disbursed

Estimated Benefits

Estimated Benefits for the Transport Sector Project
Time Estimated Economic Rate of Return (ERR) over 20 years Estimated beneficiaries over 20 years Estimated net benefits over 20 years
At the time of signing 17.2 percent 1,624,551 $187,800,000

Estimated benefits corresponds to $374.7 million of project funds, where cost-benefit analysis was conducted.

Project Description

In Tanzania, poor transport infrastructure constrains the development of agriculture, industry and commerce, and hinders access to essential social services. At the time of compact signature, less than seven percent of Tanzania’s road network was paved; the other routes were made of gravel or earth. The Transport Sector Project addressed necessary improvements to Tanzania’s road network, which serves a widely dispersed population, by investing in infrastructure to reduce transport costs, increase cash crop revenue and facilitate access to social services. Rehabilitation of road infrastructure was intended to expand connectivity across Tanzania and improve market and other linkages both domestically and with neighboring Kenya and Zambia. The project also upgraded the Mafia Island Airport to allow for easier, more efficient and safer access to the island. At compact end, MCC financed the completion of 150 kilometers of roads, which includes the installation of drainage measures and accompanying signage, as well as designs and feasibility studies for the original target of 433 kilometers. All 433 kilometers were completed by January 2015 using funding from the government to complete sections that were not finished at compact end.  On Mafia Island, 1.6 kilometers of runway and taxiways were refurbished.

Evaluation Findings

MCC is conducting performance evaluations of the Zanzibar Rural Roads, the Mainland Trunk Roads and Road Maintenance Activities for both Zanzibar and mainland Tanzania. The evaluations will use the Highway Development and Management (HDM-4) Model and potentially the Roads Economic Decision (RED) Model to assess the condition of the upgraded roads and evaluate the sustainability of these investments in the context of the roads maintenance regime. Both evaluations are expected to be available in December 2018.

MCC is also conducting a performance evaluation for the Mafia Island Airport Activity. This evaluation will seek to assess the condition and maintenance of the Mafia Airport runway post-compact to understand the residual life of the investment. It is expected to be available in December 2018.

Key performance indicators and outputs at compact end date

Key performance indicators and outputs at compact end date
Activity/Outcome Key Performance Indicator Baseline End of Compact Target Quarter 1 through Quarter 20 Actuals (as of Dec 2013) Percent Compact Target Satisfied (as of Dec 2013)
Mafia Island Airport Upgrading Activity Runway surfacing complete (%) 0 100 100 100%
Mainland Roads Activity Kilometers of roads completed (taken over) 0 433.2 190 44%
Percent disbursed on construction contracts 0 100 92.5 93%
Surfacing Complete: Namtumbo – Songea (%) 0 100 100 100%
Surfacing Complete: Peramiho – Mbinga (%) 0 100 100 100%
Surfacing Complete: Tanga – Horohoro (%) 0 100 100 100%
Surfacing Complete: Tunduma – Sumbawanga (%) 0 100 70.9 71%
Road Maintenance Fund Activity Road Maintenance Expenditures: Mainland Trunk Roads (%) 79 95 72 -43%
Road Maintenance Expenditures: Zanzibar Rural Roads (%) 75 95 82 35%
Zanzibar Rural Roads Kilometers of roads completed (taken over) 0 35 0 0
Pemba: Percent disbursed on construction contract 0 100 70 70%
Surfacing Complete: Pemba (%) 0 100 60 60%

The overall level of funding the government dedicated towards mainland trunk roads did not increase, remaining stable during the life of the compact, while the percentage of funding decreased in the short term.  During the compact period, the government oversaw a dramatic increase in road construction, coupled with a reclassification of national and rural roads, which reduced the percent of funding in proportion to the entire roads network.