Tanzania signed a 245-million-U.S.-dollar budget financing agreement with the European Union (EU) on Monday aimed at supporting strategic development projects in the next four years.

Doto James, the Permanent Secretary for the Ministry of Finance and Planning, said the 2016-2020 grant will effectively start to be implemented in the 2016/17 fiscal budget.

"The grant we have signed today (Monday) is to improve the country's management in agriculture, industrial development, health and infrastructure," said James.

Under the agreement, he said, the government of Tanzania will receive 60 million U.S. dollars from the EU as first installment for the 2016/17 fiscal year budget, adding that the remaining funds will be disbursed every fiscal budget.

James said the budget support will play an important role in complementing domestic resources for financing priority expenditures under the five-year development plan phase II.

Tanzania is on a path to rapid industrialization and aims to reach a middle income by 2025. To ensure that this growth is sustainable the government has to guarantee that it optimally captures potential revenues for the national budget.

source: Xinhua