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UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION

Project number: 180028

Project title: Programme for Inclusive and Sustainable Industrial Development (PISID) in Tanzania

Thematic area code HC2 Adv. Econ. Competitiveness HC21 Invest. Techn. & SME Dev.

Starting date: 1st June 2018

Duration: 31st December 2021

Project site: United Republic of Tanzania

Counterpart: Executing agency/cooperating agency:

Ministry of Industry, Trade and Investment (MITI)

Project Inputs: - UNIDO inputs: - Support costs (7%): - Counterpart inputs - Grand Total:

240,000 USD (in kind) 261,605 USD

4,238,817 USD

Funding source: One Fund in Tanzania

Brief description: The Programme for Inclusive and Sustainable Industrial Development (PISID) in Tanzania will be implemented with the allocation to UNIDO from the funds earmarked by the Swedish International Development Cooperation Agency (SIDA) for the Economic Growth and Employment Outcome of the Second United Nations Development Assistance Plan (UNDAP II). Through the PISID, UNIDO will complement efforts of the government, other UN agencies and several other stakeholders to address some of the challenges identified as constraining industrial development. The programme will place significant emphasis on identifying synergies with current efforts from the Government and other Development Partners (DPs) and, when relevant, will build on previous successful UNIDO initiatives, for example, those implemented during UNDAP I, 2011-2016. The programme will focus on:

• Macro level support on policy and statistics in the area of industrial development;

• Meso level support needed to develop the capacity of selected public and private institutions that foster industrial development and

• Micro level interventions at enterprises in relation to selected thematic areas or value chains (e.g. sunflower in Dodoma, seaweed in Zanzibar and others).

The program will follow a tiered approach to allow each of the components to work in a targeted manner to deliver results at each level. It will also foster collaboration and synergies across the levels. Integration will be ensured through vertical linkages between the three levels from both a top-down perspective, whereby policy makers at macro level will be informed about relevant needs of institutions and enterprises at the meso and micro levels, as well as a bottom-up perspective whereby government receives meso- and micro-level feedback on business climate improvements and requirements hampering the growth of specific value chains in the country (for example, related to physical road infrastructure, ICT infrastructure, water, energy).

Approved:

Signature: Date: Name and title:

On behalf of MITI

On behalf of UNIDO

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A. CONTEXT

A. 1. Background

Tanzania is one of the eight countries piloting the UN Delivering as One (DaO) initiative running since 2007, which has the aim to improve coherence, harmonization, efficiency, alignment and effectiveness of the UN system’s operations in the country. Since the inception of DaO and in line with the principles of One Programme, One Budgetary Framework, One Leader and Communicating as One, the UN system in Tanzania has successfully completed two phases. The first was characterized by Joint Programmes (JPs) from 2008 to 2011 and the First United Nations Development Assistance Plan (UNDAP I) 2011-2016. The second UNDAP was launched in May 2016 and its implementation started on July 1st, 2016. Formulation of UNDAP II was guided by the UN key programming principles such as Human Rights Based Approach, Gender Equality and Women’s Empowerment, Environmental Sustainability, Culture and Development, Capacity Development and Results Based Management (RBM). UNDAP II, like its predecessor, provides a collective, coherent and strategically focused plan guided by national and international priorities such as the Tanzania Development Vision 2025, Zanzibar Vision 2020, the Second Five Year Development Plan (FYDP II), the Third Zanzibar Strategy for Growth and Reduction of Poverty (ZSGRP III aka MKUZA III) and the Sustainable Development Goals (SDGs). Furthermore, UNDAP II is intended to capture the entire range of activities supported by the UN system in Tanzania and is aligned to the government fiscal year cycle running from July to June. UNDAP II has four Thematic Results Areas (TRAs), namely, (1) Inclusive Growth, (2) Healthy Nation, (3) Resilience and (4) Democratic Governance, Human Rights and Gender. Focusing on its mandate of promoting Inclusive and Sustainable Industrial Development (ISID) as stated in the Lima Declaration adopted on the 2nd December 2013 during the 15th Session of the UNIDO General Conference, UNIDO is participating in two TRAs of UNDAP II, namely, Inclusive Growth and Resilience1. As with UNDAP I, UNIDO actively participated in formulating UNDAP II and will participate fully in its implementation. The participation of UNIDO in UNDAP II is elaborated in its Country Programming Framework (CPF), which has 5 components from statistics and policy to agricultural and non-agricultural sector interventions that will benefit the economy with a specific focus on women and youth. However, following a request by the Government of Tanzania (GoT), and a subsequent Joint Declaration signed between UNIDO and the Government on 8th March, 2018, the CPF is now expected to be converted into a Programme for Country Partnership (PCP) along the lines of the successful PCP pilots in Ethiopia, Peru and Senegal. The conversion process is not expected to yield a variation from the priorities already identified but will rather secure higher-level commitment and leadership from the GoT, with the ability to expand the partnership base, and hence the governance arrangements, to include Development Finance Institutions (DFIs) and other major players in the industrial development of the country. PISID will be a part the CPF/PCP when formally approved. The goal of the United Republic of Tanzania is to become a middle income and semi-industrialized country by 2025 through structural change towards manufacturing, as enunciated in the Tanzania Development Vision 2025 and the Zanzibar Vision 2020 and outlined in the Long-term Perspective Plan (2010-2025) implemented through a series of three Five-Year Development Plans (FYDPs). The current Second Five Year Development Plan 2016/17-2020/21 is indeed dedicated to “Nurturing an industrial economy” and comes together with the third Zanzibar Strategy for Growth and Reduction of Poverty (MKUZA III). The development vision(s) and strategic frameworks are very clear on the potential forward and backward linkages between the industrial sector and other sectors such as agriculture, tourism, education, health, infrastructure, energy and environment, to mention a few. Tanzania is amongst the least developed countries (LDCs) in Africa, with approximately a third of its over 50 million population estimated as living below the basic needs poverty line. Nearly 70 percent of Tanzanians live in rural areas and are engaged mainly in the agricultural sector, which is predominantly subsistence. Poverty levels are also higher in the rural than urban areas.

1 Both UNDAP and UNIDO’s programme framework are flexible to accommodate emerging government priorities and

demands from other sources. Government request to UNIDO to support and promote domestic production of pharmaceuticals will, if implemented, require UNIDO to participate in a third Thematic Result Area of UNDAP II, namely, Health Nation.

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A.2. Economic context From 2005-2014 added value GDP at constant (2007) prices grew at an average annual rate of approximately 7 percent for Tanzania Mainland, raising the GDP from nearly 20,730 TShs Billion to slightly over 30,000 TShs Billion. However, growth was not equally distributed across the primary, secondary and tertiary sectors. The latter counted for 56 percent of the added value GDP in 2005 and grew faster to reach 59 percent in 2014. During the same period, the contribution of the agriculture, forestry and fishing sector declined from 23 percent to 18 percent while that of industry and construction increased modestly from 22 percent to 25 percent. This was, however, not enough to help bring about the envisaged structural transformation of the country towards manufacturing. For Zanzibar, the average annual GDP growth rate reached a maximum of 7 percent in 2014. However, during 2009-2013, growth was highest at 16.98 percent for transport and communications and lowest at 2.26 percent for manufacturing. Several indicators suggest that Tanzania is not performing well in a number of socio-economic fronts including in the business environment and international trade. For example, whereas Tanzania is ranked 137 out of 190 countries in the ease of doing business2, its contribution in international markets for manufactured exports was 0.012% in 2013, down from 0.017% recorded in 20103. This situation results from a combination of factors including unsatisfactory efficiency and capacities of several industrial support organizations (ISOs). The Tanzania development frameworks recognize the significant potential of the productive sector to contribute to the country’s economic growth and equitable income distribution, with the micro, small and medium enterprises (MSMEs) playing a key role. However, entrepreneurs face difficulties to start business whereas most of the established ones, particularly the MSMEs, do not prosper due to several challenges including limited access to appropriate technology, flaws in administering the business, the difficult business environment and difficulties in accessing credit and markets. Technological innovations and new products developed by individuals or research institutions in the country usually do not get picked up and fail to adequately enter economic processes, and hence fall short in generating socio-economic impact. As a result, industries disproportionately depend on imported technology, which is often not well adapted to the local (Tanzanian) conditions and business environment and mostly not affordable to MSMEs. This results in low levels of competitiveness and, in technology-intensive operations such as in oil and gas extraction or mining, with international companies having difficulties finding suitable local subcontractors or suppliers of local services and products, even with existence of a local content policy4. To be competitive on domestic, regional and international markets, products and processes have to be tested and certified by nationally and internationally accredited institutions. Likewise, the institutions of the national standards compliance infrastructure need to be accredited. Tanzania has established regulatory, quality and standards assurance institutions including the Tanzania Bureau of Standards (TBS) and the Tanzania Food and Drugs Authority (TFDA). The two institutions, however, at times, have to rely on limited capacities to respond to the demand of a growing number of enterprises and a wider product portfolio. Both institutions mainly operate from Dar es Salaam and their zonal offices whereas their services are required throughout the country. Of recent, the Zanzibar Bureau of Standards (ZBS) and the Zanzibar Food and Drugs Board (ZFDB) have been established to engage in product quality, safety and standards assurance in Zanzibar and increasing the delivery of services by these institutions is still a challenge. The manufacturing sector is considered to be the engine of growth, poverty reduction and driver of economic transformation in Tanzania. A survey conducted by the Ministry of Industry, Trade and Investment (MITI) in September 2010 established that about 3,162,886 small businesses were operating in the country at that time. Based on the International Standard Industrial Classification of All Economic Activities (ISIC), the enterprises were in the sectors of trade (1,758,896 or 56%), services 964,235 or 30%), manufacturing (429,050 or 14%), mining and quarrying (3,684 or 0.1%) and other sectors including agriculture (15,021 or 0.5%). These businesses were owned by about 2,754,697 persons and were employing about 5,206,168 persons. Although the businesses

2 World Bank, 2018: Global Ranking of Doing Business 3 URT, 2016: Tanzania Industrial Competitive Report 2015, page 30. 4 UNIDO’s 2014 Tanzania Investor Survey Report found that, on average, 70% of manufacturing inputs are imported.

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contributed approximately 27% to Tanzania’s GDP in 2010, the majority were operating informally: only 3.9% were registered under the Business Registration and Licensing Agency (BRELA) and 19.7% had formal licences under other arrangements. The production value of the informal sector is also not featuring in the national accounts. With the aim to further understand the dynamics in the manufacturing sector, the 2013 Census of Industrial Production for Tanzania mainland, supported technically by UNIDO, revealed the existence of 49,243 industrial establishments categorised into small and large scale, numbering 47,921 and 1,322, respectively5. Of this number, 48,474 establishments (47,475 being small and 998 being large) were in the manufacturing subsector particularly manufacturing food products, wearing apparel, furniture and fabricated metal products (except machinery and equipment). The survey also suggested that the survival rate of MSMEs is low. This is also consistent with the MITI 2010 survey, which found that 571,417 businesses had closed, after an average lifespan of 4.1 years. A number of challenges have been identified as constraining socio-economic development and industrial sector performance in, Tanzania. These can be summarized to include, among others, the following:

• Limited availability of serviced land for industrial processes

• Limited access of enterprises to financial services

• Limited access of enterprises to appropriate technology, including equipment

• Enterprises failing to secure appropriately skilled personnel on labour market

• Unfavourable business environment (e.g. registration procedures, regulatory environment)

• High levels and multiplicity of taxes and levies

• Limitations to access business information

• Limited access to good quality raw and intermediate inputs, and packaging materials at competitive and predictable prices

• Limited access to industrial support services e.g. certification of products and laboratory analytical services

• Limited access to markets

• Stiff competition with cheap imports, counterfeits and substandard goods prevalent on markets

• Poor access to energy - low connectivity, high tariffs, erratic supply. Standby generators are even more expensive.

A.3. Institutional context The Programme for Inclusive and Sustainable Industrial Development (PISID) in Tanzania will be implemented with the allocation of funds to UNIDO as earmarked by SIDA for the Economic Growth and Employment Outcome of UNDAP II. Through the PISID, UNIDO will complement efforts of the Government, other UN agencies and several other stakeholders to address identified challenges to industrial development. The programme will place emphasis on identifying synergies with current Government efforts and, when relevant, will build on previous successful UNIDO initiatives implemented during UNDAP I and before. The primary objective of PISID is to support local entrepreneurs, with a much stronger focus on women and youth, who are involved in the selected value chains to grow and contribute increasingly to the economy of Tanzania. This will be achieved through collaboration with a number of public and private sector institutions of which some require capacity building for them to provide effective and efficient services to entrepreneurs6, including support for effective evidence-based and business-friendly policies. The key public institutions include the Ministry of Industry Trade and Investment (MITI), the Ministry of Trade Industry and Marketing (MTIM), the President’s Office - Regional Administration and Local Government (PO-RALG), the Prime Minister’s Office (PMO), National Bureau of Statistics (NBS) and the Office of the Chief Government Statistician (OCGS) in Zanzibar. Others are the Tanzania Bureau of Standards (TBS), the Zanzibar Bureau of Standards (ZBS), the

5 Categorization was based on number of employees, being between 1 and 9 for small and 10 and above for large enterprises. 6 Support of the programme to such institutions will include establishment of strategies to reach organizational and financial

sustainability when PISID comes to an end.

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Tanzania Food and Drugs Authority (TFDA), the Zanzibar Food and Drug Agency (ZFDA), the Small Industries Development Organization (SIDO), the Tanzania Industrial Research and Development Organization (TIRDO), the Tanzania Engineering and Manufacturing Design Organization (TEMDO), the Vocational Educational and Training Authority (VETA), the Tanzania Trade Development Authority (TanTrade), the Tanzania Investment Centre (TIC), Tanzania’s Export Processing Zones Authority (EPZA), the Business Registration and Licensing Agency (BRELA), the Zanzibar Business and Property Registration Authority (ZBPRA) and the Fair Competition Commission (FCC).

Key private sector institutions with which partnerships will be established include the Tanzania Private Sector Foundation (TPSF), Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA), Tanzania Food Processors Association (TAFOPA) and the Confederation of Tanzania Industries (CTI). There will be one programme steering committee (PSC) with representatives from MITI, MITM, PO-RALG, CTI, TAFOPA, ILO (a UN lead agency for the Economic Growth and Employment Outcome group of UNDAP II), UNIDO Representative and SIDA (the donor). UNIDO will also be the secretariat to the PSC.

B. REASONS FOR UNIDO ASSISTANCE

The United Nations system is one of the Development Partners to the United Republic of Tanzania (URT). Support of the UN to URT is defined in the Second United Nations Development Assistance Plan 2016/17-2020/21 (UNDAP II), which is the joint business plan for the two parties. UNDAP II, is aligned to the national development strategies and frameworks and specifies the support the UN system envisages to provide to complement the efforts of Tanzania to realize her development goals. UNDAP II has four Thematic Result Areas (TRAs) consisting 14 Outcomes and 56 Outputs. UNDAP II is funded from three main sources: Core contributions by individual UN agencies, donor contributions mobilized separately by individual agencies (i.e. Non-core funds) and contributions by donors directly to the One Fund of UNDAP II. The latter can be un-earmarked or earmarked by the donor to a specific TRA or Outcome of UNDAP II. The Swedish International Development Cooperation Agency (SIDA) has pledged to contribute to UNDAP II approximately USD 37 Million earmarked for four UNDAP Outcomes including all (the three) found under the Democratic Governance, Human Rights and Gender Equality TRA and the other being the Economic Growth and Employment Outcome under the Inclusive Growth TRA in which UNIDO is participating and within which PISID falls7. UNIDO has a comparative advantage as the UN agency mandated to promote industrial development whereby its global experience and expertise has won the confidence of the majority of stakeholders in the industrial sector, especially in the light of the ISID mandate and SDG 9. A good track record in Tanzania, working with both public and private sectors as well as active presence in the field, make UNIDO a partner of choice for many industry-related support programmes. In the previous and recent years, UNDO has successfully supported Development Programs to upgrade the cashew nut, red meat/leather, sunflower and horticulture enterprises/value chains based on detailed diagnostic studies conducted by teams of experts from the Tanzanian Government and UNIDO. While those UNIDO-supported activities did not go beyond piloting, PISID will work towards an integrated development by targeting highly specific interventions to different stages of the value chains. Support was also provided on capacity development of key industrial development and trade facilitation and regulatory institutions such as MITI, MITM, TBS, TFDA, NBS, TIRDO, TEMDO and FCC. The beneficiary enterprises reduced losses of resources during the processing stage, increased production and productivity and improved quality and standards of their produce. Ultimately, some products were certified by the Tanzania Bureau of Standards (TBS) and some enterprises attained ISO 22000 certification. UNIDO also helped to establish the National Business Council, which is a public-private sector dialogue (PPD) forum chaired by the President of URT. UNIDO’s support is

7 Not all participating agencies received allocation in this first round. Nine (9) agencies received funding, with UNIDO receiving

15% of that.

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needed to consolidate gains made in these areas as well as help achieve other national priorities, including those derived from the 2030 Agenda for Sustainable Development. In particular, UNIDO has successfully helped establish an industrial intelligence system based on two solid foundations: a) the regular joint publication of two key reports among NBS, MITI and CTI, the Annual Surveys of Industrial Production and the Index of Industrial Production and b) the establishment of Industrial Intelligence Units (IIUs) housed at MITI and zMTIM, providing regular industrial competitiveness reports and analytical outputs that contribute to evidence-based policy formulation necessary to enhance the performance of industrial service entities as well as the development of integrated industrial value chains. Work on data, industrial policy and statistics will also contribute to meeting new reporting requirements for the SDGs, including goal 9 on industry, innovation and infrastructure. Under UNDAP I, UNIDO supported the establishment of the Subcontracting and Partnership Exchange Centre (SPX) within the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA). The centre played a very important role of strengthening business partnership and providing capacity building support. More than 300 Tanzanian supplier/subcontractors were profiled, 30 of them were benchmarked, but only a few matchmakings with buyers were successful. Furthermore, three cases of joint ventures between domestic and foreign owned enterprises were facilitated. Achievements on the SPX Programme in the previous UNDAP cycle will be used for promoting further investments into the industrial sector. The mining sector, the oil and gas industry, as well as the primary agricultural products sector are expected to continue drawing most FDI in the near future. The United Kingdom, China, South Africa, the European Union and Canada are the country’s primary investors. In addition to attracting new FDI and to harness multiplier effects in terms of domestic investments, SPX can strengthen backward linkages through existing FDI activity to the domestic sector across all economic sectors, including manufacturing. As part of the business environment improvement reforms, TIC and the Zanzibar Investment Promotion Authority (ZIPA) were established to be “one stop centres” in providing investors with various business and investment related services “under one roof”. The agencies have not been able to serve investors as envisaged because, although sister institutions have desks located in these offices, their operations are still being done manually, each being highly independent of another. The institutions have also not compiled profiles of investment opportunities for marketing to investors and they do not have M&E systems to monitor the companies they register and their performance. This finding is reconfirmed in UNIDO’s 2014 Tanzania Investor Survey Report8 which calls upon TIC and ZIPA to work together to fine-tune the investment incentive framework based on a comprehensive and sustained impact analysis of existing Foreign Direct Investment (FDI) in the country. Overall the results from the Tanzania Survey do suggest that there is strong need to continue to generate firm level data from similar surveys, and on a continuous basis, to improve on the monitoring capabilities of investment promotion stakeholders in the country. For an entity such as TIC, which aims to promote and facilitate foreign and domestic investment, it is crucially important to be able to draw upon analysis of foreign and domestic investment activity, with particular emphasis on selected value chains such sunflower, horticulture, seaweed and anchovies, to the extent that performance comparisons between the two ownership categories can be better contextualized. In this context, strengthening business partnership between domestic and foreign investment and public and private industrial sectors remains important and TCCIA, the institution which used to host the Subcontracting and Partnership Exchange Centre (SPX), requires further capacity building support to execute this function efficiently and effectively. Other support entities will be considered based on peculiarities of the selected value chains. Also, under UNDAP I, UNIDO collaborated with the Tanzania Exporters Association (TANEXA) and the Zanzibar National Chamber of Commerce Industry and Agriculture (ZNCCIA) to raise awareness of MSMEs on business formalization processes and procedures as well as on national and international trade requirements and procedures. Whereas the former covered aspects such as product quality, standards and certification, the later included identifying the buyers and business formalization. Following a request to UNIDO made by TANEXA and ZNCCIA to extend the awareness raising support to reach a critical mass of enterprises, an agreement was reached to jointly

8 UNIDO (2014): Tanzania Investor Survey Report, United Nations Industrial Development Organization: Vienna.

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(UNIDO/TANEXA and UNIDO/ZNCCIA) develop simplified manuals for distribution to a wide range of MSMEs and other beneficiaries for use as quick reference materials. The problem of unemployment and underemployment, particularly among young men and women, is growing rapidly in Tanzania, whereby approximately one million young graduates enter the labour market annually, with only about 200,000 graduates being absorbed. In an attempt to support government efforts to address this challenge, UNIDO collaborated with PMO to design and implement an Internship Programme as part of a project titled “Enhancing Youth Employability and Entrepreneurship in Tanzania” which was a component of the Joint Programme on Youth Employment (JPYE) implemented during 2015/2016. The intervention involved attaching young graduates from Higher Learning Institutions (HLI) to local MSMEs for three months with the purpose of putting in practice the mainly theoretical knowledge gained from HLIs and gaining practical experience. The programme emphasized the matching of skills needed by an enterprise with the graduate’s field of training. 119 out of 224 graduates attached to 86 enterprises completed the three months internship with 55 being retained by the labour market by either staying at the MSME where the internship was done or getting a job elsewhere. Others started their own businesses. The interns who reported on their dropping out gave reasons such as getting a job after demonstrating their potentials in the course of undergoing the internship, developing confidence to start own business and failure to meet associated costs (transportation and lunch), since the MSMEs were not obliged to pay the interns. Traditionally, in Tanzania structured graduate internships exist for fields such as medicine, pharmacy and architecture, where the graduates are attached to large entities like hospitals and government institutions. While internship opportunities in such fields are increasingly becoming unavailable in Tanzania, the UNIDO/PMO intervention was innovative by allowing graduates educated in different fields from the HLIs and MSMEs to work together. On one hand, the programme enabled the interns to gain confidence that the skills and knowledge they possess are assets which could enhance their chances of getting jobs or starting their own business and, on the other hand, the MSMEs benefitted from technical contributions of the interns to their activities - improved resource efficiency, increased productivity and increased enterprise sales/revenue. The programme raised the understanding of the technocrats and professionals, including the academia, that the MSMEs have an enormous potential to provide young graduates with internship opportunities for mutual benefit. Ultimately, with technical support from UNIDO, PMO formulated the National Internship Guidelines which stakeholders are now using to engage graduates into internships where they obtain the much needed practical and workplace experience. At the request of the Revolutionary Government of Zanzibar to UNIDO to support promotion of the seaweed industry, particularly as regards raising the farm gate prices and cushioning seaweed farmers from highly fluctuating world market prices, and Zanzibar’s low competitiveness due to its distance from the major dry seaweed buyers, UNIDO conducted a seaweed value chain feasibility study in 2013. The study suggested to process live seaweed into pulp, which could be processed to final products like carrageenan and juice concentrate which can potentially be used as a growth enhancer. Private sector participation was envisaged to invest in the live seaweed processing plant, developing the pulp and juice quality and standards which can be sold, and developing these products’ marketing system. The ultimate project aim was not reached due to inadequate response from the private sector. However, UNIDO was able to procure a wide range of equipment to ease transportation of seaweed to shore during harvesting and enable small scale processing into newly introduced products which use live seaweed or powder as raw material. Through PISID, UNIDO will continue to provide limited support to the seaweed industry while mobilizing resources and the private sector to develop medium scale live seaweed processing facilities and marketing channels.

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C. THE PROJECT C.1 Objective of the project The programme is aligned with Outcome I of the Inclusive Growth TRA of UNDAP II: The economy is increasingly transformed for greater pro-poor inclusiveness and improved opportunities for decent and productive employment. It aims at addressing some of the main challenges facing development of the industrial sector in Tanzania, as summarised under section A.2. The programme objective is to enhance the contribution of industry to inclusive economic growth in Tanzania through two main channels:

• Strengthening public and private industrial support entities to better design and implement policies, as well as meet the demand for high quality services that will boost investment in and growth of the manufacturing sub-sector;

• Facilitating the establishment, expansion and competitiveness of productive enterprises in selected value chains, thus contributing to the attainment of more decent and productive employment, extended market access and expanded income streams at various levels.

Thus, the programme will focus on:

• Macro level support on policy and statistics in the area of industrial development,

• Meso level support needed to develop the capacity of selected public and private institutions that foster industrial development, and

• Micro level interventions at enterprises in relation to the sunflower, seaweed and other value chains in Dodoma, Zanzibar and possibly other locations.

Integration will be ensured through vertical linkages between the three levels or result clusters such that policy reviews at macro level are informed by the relevant needs and aspirations of institutions and sector enterprises at the meso and micro levels respectively. Interventions at the meso level are expected to stimulate regulatory and strategic policy improvements aimed to support more inclusive and sustainable industrial development in URT. The meso-level intervention is expected to link to the macro dimension through the generation of empirical evidence on FDI perception, investment impact assessment including the ever-increasing emphasis on the compliance and impact of investment on the sustainable development goals (SDGs) and policy advocacy linkages to investment promotion frameworks. It will also include identified interventions to upgrade country and regional specific standards, quality infrastructure and conformity assessment frameworks that seek to ameliorate the business environment and thereby make domestic market infrastructure more conducive to investment. Similarly, it would seek to link to the micro dimension through the identification of investment opportunities and supporting investment mobilization in targeted sectors, including agriculture value chains, generating stronger linkages between the investment promotion framework and the micro and small and medium enterprise (MSME) sector. C.2 The UNIDO approach The UNIDO approach involves capacity building both at the institutional and the enterprise levels and promotes a dynamic two-way dialogue with policy makers. The approach is based on UNIDO’s understanding that integrated efforts need to be made to bring about change, development and innovation among businesses along the value chain. Internally, UNIDO places strong emphasis on inter-departmental and cross-disciplinary cooperation. PISID is thus the result of a novel team work between four departments, namely the Department of Policy, Research and Statistics (through the Research and Industrial Policy Advice Division), the Department of Trade, Investment and Innovation (through the Investment Promotion Division), the Department of Agri-business Development (through the Rural Entrepreneurship, Job Creation and Human Security Division), and the Department of Programmes, Partnerships and Field Integration (through the UNIDO Field Office in Tanzania). The PISID interventions will be clustered under the following four components:

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1. Data, Industrial Policies and Strategies (DIPS) Under the DIPS component, PISID will ensure that capacities in MITI and MTIM, as well as NBS and OGCS, are improved to collect and analyze necessary information and statistics that can inform decision makers and calibrate policy making up to a detailed level that provides the necessary enabling conditions for businesses in the industrial sector to grow. This includes to channel information on business realities to policy makers as well as making businesses appreciate the advantages of certain aspects of formalization and regulation, enabling them to receive smart promotional support while becoming more competitive. Specifically, under DIPS, PISID will continue to strengthen the established industrial intelligence system which includes regular joint publication of relevant reports by NBS, MITI and CTI (such as the Annual Surveys of Industrial Production and the Index of Industrial Production) and by IIUs housed at MITI and zMTIM (such as industrial competitiveness reports and other analytical outputs). Strengthening of the industrial intelligence system is vital for the feeding of policy recommendations from the evidence-based analysis into effective policy instruments, including review of industrial strategies, policies and related action plans in both Tanzania Mainland and Zanzibar. Ad hoc workshops, public-private sector dialogue and additional training sessions will serve the purpose to strengthen the linkages from data collection to policy-making. Additionally, the linkages between the IIUs and relevant research institutions, from the private sector such as Policy Research for Development (REPOA)9, to the academia such as the University of Dar es Salaam (UDSM), will also be strengthened in the shape of a think-tank. Refresher and new trainings on relevant subjects will be provided according to the needs expressed by counterparts and to strengthen the analytical capacities of the IIUs and relevant institutions. The IIUs will continue producing biennial industrial competitiveness reports and relevant outputs as advised by MITI management and other institutions. Proper launch, dissemination and awareness campaigns, including follow-up on agreed policy recommendations, will be ensured. Furthermore, there will be follow-ups on implementation of the industrial performance M&E system devised with President’s Office-Planning Commission (POPC) at impact level, and taking into account SDG9 indicators, ensuring relevant institutions are providing the necessary updates and recommendations at policy level. 2. Augmenting Results for Industrial Support Entities (ARISE) Investment into the productive sectors of Tanzania, including the agricultural sector, is expected to increase local private sector competitiveness, stimulate trade and increase employment. The meso-level interventions under ARISE are aimed to assist Tanzania in its efforts towards inclusive and sustainable development, by facilitating the process of identifying, mobilizing capital, knowledge and technological resources for a more targeted investment development impact. Under this component, the focus will be on building capacities among Industrial Support Organizations (ISOs) and business development service providers. These are institutions that focus on business administrative support, the application of quality and other standards (i.e. TBS/ZBS and TFDA/ZFDB); industrial research and analytical services (including TIRDO and TEMDO); business linkages improvements (for example SIDO) and investment promotion. The foreseen interventions include capacity building initiatives to a wide range of national investment promotion stakeholders, in particular the Tanzania Investment Centre (TIC), the Zanzibar Investment Promotion Agency (ZIPA) as well as to other business support institutions, in particular those related to national and regional quality infrastructure systems whose proper functioning has a direct impact on the business climate and, hence, ensuing investment levels. As a result, the businesses will be able to source more inputs, have access to better knowledge and technology, produce products of improved quality and standards, and thus become more competitive. Such capacity building will be aimed to support organizational restructuring, improve monitoring of foreign direct investment activity and the conduct of more effective investment targeting and promotion driven by evidence-based policy advocacy which benefits domestic investment in linked economic sectors. The meso-intervention will also generate empirical data and analysis on investment activity and impact that can be looped back into the process of national and regional policy formulation of the macro-level interventions under the DIPS component. UNIDO’s 2014 Tanzania Investor Survey Report10 calls upon TIC and ZIPA to work together to fine-tune the investment incentive framework based on a comprehensive and sustained impact analysis of existing FDI in the country. Overall the results from the survey suggest that there is strong need to

9 Formerly REPOA was Research for Poverty Alleviation 10 UNIDO (2014): Tanzania Investor Survey Report, United Nations Industrial Development Organization: Vienna.

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continue collecting firm level data to improve the monitoring capabilities of investment promotion stakeholders in the country. UNIDO's hands-on experience with the various facets of investment promotion, application of new technologies and technology transfer has led to the development of methodological instruments and tools11, such as those related to investment monitoring through investor surveys12, the Computer Model for Feasibility Analysis and Reporting (COMFAR)13, a software that permits the user to simulate the short- and long-term financial and economic situation of investment projects, as well as the Subcontracting and Partnership Exchange (SPX) Programme14. Particularly, regarding the importance of investment promotion and agricultural transformation, the meso-interventions of ARISE would seek to appraise capacity improvement needs of the agricultural sector, emanating from the work undertaken under component 3 (DIVE) to identify and appraise the investment opportunities in different segments of the value chain as well as seek to mobilize investment and financial mechanisms for the agricultural sector, bringing sector needs to the attention and action of investment promotion stakeholders. Capacity development of other business development service providers and industrial development and regulatory institutions will focus on quality of services and increasing responsiveness to their mandates. Here, further capacity building of regulatory institutions for products quality, safety and standards certifications deserves further attention. TBS/ZBS, TFDA/ZFDB, TEMDO and TIRDO will be supported through equipment and training to improve their efficiency and effectiveness in conducting products quality, safety and standards assurance processes. The support will also contribute to international accreditation of the institutions, or some of their laboratories. 3. Developing Industrial Value Chains and Enterprises (DIVE) Under this component, the focus will be to provide direct support to businesses along selected value chains (edible oils and other prioritized value chains). There will be on the spot capacity building to enterprises, the set-up of demonstration plants and development of improved products, the development and promotion of improved business models, and facilitation of access to technology and finance. In order to reach a critical mass of enterprises, support from DIVE will focus on clusters working in selected value chains at selected locations. DIVE will also cater for providing young male and female graduates in prioritized value chains with internship and work opportunities responding to needs of MSMEs. UNIDO’s experience is that partial approaches to value chain development do not help in situations of sectoral underdevelopment. Providing market access to some producers, or introducing a technology to some processors, or fixing business plans and access to finance for some suppliers in an isolated way will not help. What is required is addressing the various bottlenecks in value chain development simultaneously. This has been also the lessons from the development of the cashew nut, red meat, sunflower and horticulture value chains during the implementation of UNDAP I in Tanzania. In these value chains, more substantial efforts would have been required to ensure solid business development unfolds in each of the steps in value addition. Pilot processing plants can fulfill incubation functions but sufficient knowledge and capacity building needs to be performed around all the businesses along the value chain and these need to be also properly linked. To start work on DIVE, UNIDO will therefore undertake a quick review of its past and ongoing support to the sunflower value chain and possibly invest in solid diagnostics of new value chains in response to emerging Government priorities. Based on a clearer understanding of how business development must unfold, UNIDO will develop action plans indicating how public and private investments can be channeled into businesses, taking account of the systemic nature of the value chain development problem. Whenever possible, efforts will be made to achieve synergies with similar programmes, including a joint FAO-UNIDO programme labeled the Accelerator for Agricultural and Agroindustry Development and Innovation (3ADI+). Most activities to be carried out after proper development of an

11 Refer to strategy document, https://www.unido.org/sites/default/files/2017-11/TII_PROMOTING_INVESTMENT_FINAL.pdf 12 Refer to UNIDO Africa Investor Survey, 2011 featuring Tanzania, https://www.unido.org/fileadmin/user_media/Publications/Pub_free/AIS_Report_A4.pdf 13 Refer to https://www.unido.org/comfar/comfar-software.html 14 Refer to https://spx.unido.org

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action plan then will focus on ensuring that from public and private sides, sufficient support in the implementation of the business plans is provided. This includes helping MSME to acquire technology, develop and implement business plans, get finance, find markets, improve products, organize supplies and comply with standards. 4. Coordination, Monitoring and Evaluation (COME) The overall management supervision, monitoring and evaluation of PISID will be under the UNIDO Representative (UR), who will delegate component management responsibilities to technical Project Managers who are subject matter specialists and are expected to implement assigned PISID components according to the activities defined in the project document, decisions made by the steering committee, as well as budget appropriation principles that maximize effectiveness and cost efficiency. Such an arrangement will ensure that:

(i) The different clusters/components are linked properly to ensure a high level of integration at all stages of planning, implementation and completion;

(ii) Linkages among the various UNIDO supported projects within and outside the programme are fully exploited with the full cooperation of the component technical leads15;

(iii) Linkages with UNDAP II interventions being implemented by other agencies are also exploited to satisfactory levels, and

(iv) UNIDO’s response to needs and landscape changes on the ground is relevant and swift. A separate budget under the COME component will be maintained for coordination and monitoring of results of all the technical PISID components. It will also cover communication and other generic activities.

In light of the above, the COME component will ensure that the three other components get the sufficient logistical and management support and that all the PISID activities and experiences are adequately represented and coordinated with other UNDAP II activities and other ongoing programmes and projects carried out by Government, development agencies and private sector actors. COME will also ensure the monitoring and evaluation of PISID activities in compliance with the UNDAP II and internal UNIDO reporting criteria, as well as the dynamic documentation and dissemination via media on progress and results. Provision will be made for organizing joint monitoring missions involving key stakeholders such as representatives from government, donors, beneficiary communities, selected development partners, the participating UN agencies and media houses at agreed intervals. Finally, at least one independent evaluation will be carried out in line with UNIDO policies and guidelines. The COME component will seek to reap concrete synergies between the macro/meso/micro-level interventions of DIPS, ARISE and DIVE. Target groups The primary programme beneficiaries will be agribusinesses in the area of manufacturing and agro-processing, many of which involve women and youth, in selected value chains and operating in selected locations (micro level) or being attended by the institutions whose business development service functions are to be strengthened through the envisaged meso-level interventions. Opportunities will be opened not only for established enterprises to formalize and grow but also for start-ups. Young graduates, who often face difficulty to secure employment, will find internship opportunities and gain practical skills which will enhance their chances to get jobs or start their own businesses. As a result, new employment opportunities will be created, industrial production improved in quality/standards and quantity, and personal and enterprise incomes increased. Secondary beneficiaries of the programme will include stakeholders at various stages of the selected value chains, for example farmers through broadened markets for their produce, livestock keepers for increased availability of feed supplements (like oilseed cake), traders of the relevant produce through increased business volumes and the general public through increased supply of products with improved quality and safety on markets. The private and public ISOs and BDS providers will benefit through the improvement in their capacities to deliver services to a large number of customers. Also, private sector institutions like TPSF, TAFOPA, TCCIA and CTI will benefit from the programme

15 The last two UNIDO Country Programme Evaluations, covering the periods 2008-2011 and 2011-2016, observed the lost

opportunities to increase the magnitude of interventions which UNIDO is implementing in Tanzania due to failure to capture the potential linkages since projects are implemented in total isolation. Overall management by the UNIDO Representative has the potential to promote integration and thus bring immense improvements on the situation.

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though potential growth of their membership and the support they will get to advance their advocacy agenda. Specific importance will be attributed to the Tanzania Investment Centre (TIC) as the national institution mandated to promote foreign direct investment (FDI) whose economic contribution goes beyond capital inflows in stimulating technology transfer, forward and backward linkages and entrepreneurial inclusion. With increased produce volumes, the country will save foreign exchange through reduced imports and earn foreign exchange through exports. Also, due to increased numbers of formal enterprises, government revenue collections will rise. Gender considerations Gender mainstreaming is high on the political agenda of the Government of the United Republic of Tanzania and the Government actively promotes gender equality and gender equity. In the Tanzania Development Vision 2025, for example, one of the targets is to achieve gender equality and the empowerment of women in all socio-economic and political relations and cultures. Furthermore, in 2000 the Women and Gender Development Policy was enforced and to support its implementation the National Strategy for Gender Development was formulated in 2008. Even though gender inequality is being addressed by the Government, it is still part of the daily experience of a large proportion of Tanzanian women. Women’s discrimination is deeply rooted in the patriarchal system, customs and traditions and the promotion of gender equality and equity encounters many challenges such as gender-insensitive macro and micro policies, insufficient resources available to address gender inequalities, or weak institutional mechanisms for gender development. Women in Tanzania are still inadequately represented in decision-making processes at all levels; women often cannot benefit from the same educational opportunities as men, and women often have difficulties accessing trainings and courses, including those in vocational training centres. Many women, both rural and urban, often lack entrepreneurial skills, have inadequate access to capital and face security problems all of which contributes to low productivity, persistent poverty and low social status of women. In view of the importance of gender mainstreaming, one of the four Thematic Result Areas (TRA) of UNDAP II has a specific gender focus (Democratic Governance, Human Rights and Gender Equality). Furthermore, the two UNDAP II TRAs in which UNIDO is actively participating, which are Resilience and Inclusive Growth, promote gender equality and women’s empowerment. UNIDO recognizes that gender equality and the empowerment of women have a significant positive impact on sustained economic growth and inclusive industrial development, which are key drivers of poverty alleviation and social progress. The PISID will therefore pursue gender mainstreaming at all programme levels. The development of selected industrial skills (e.g. with the academia, vocational skills training institutions) will be supported through review of existing curricula or the development of new demand-driven training programmes, especially for youth and women in the PISID Programme. Special attention will be paid to ensure gender balanced representation and participation in programme activities and decision-making processes and it will be ensured that women and youth entrepreneurs have access to the trainings and workshops organized. In the planning and organization of trainings and workshops it will be ensured that they are in line with women’s needs and that schedules will be arranged so as time and place do not represent impediments for women to participate.

At the macro-level, DIPS will ensure that regular annual surveys of industrial production continue

taking into account gender and age (youth) dimensions across employment, skills and productivity

variables at macro and sectoral level. Resulting analytical outputs will include analysis and policy

recommendations calibrated to address gender inequality and youth employment related issues and

challenges.

Furthermore, at the micro level (DIVE component), PISID will promote women’s integration into

productive activities along the targeted value chains by including gender analyses in the integrated

value chain diagnostics to identify gender-inequality related problems and challenges along the entire

value chain and by incorporating gender mainstreaming strategies into all action plans to be

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developed. For the development of the gender mainstreaming strategies, gender workshops will be

organized for all targeted value chains, with gender and sectorial experts and representatives of

relevant women groups.

An overview on the gender groups which will most benefit from the project activities under the DIVE

component is provided in the following table, indicating how the different activities will promote gender

mainstreaming.16 The table specifies for each of the activities which value chain segment will be

positively impacted by the activities implemented and, by means of the colour code, it indicates the

expected gender balance of participants/beneficiaries per output and value chain segment

Project component and its strategies for gender mainstreaming

Primary production

Processing Marketing/ Commercial-lization

Service provision

Meso level institutional development

Policy making support

DIVE

• Gender-inequality related problems and challenges along the entire value chain identified

• Gender mainstreaming strategies developed

• Women empowerment through enhanced knowledge on technological innovations

• Women empowerment through active involvement in decision making processes

• Women empowerment through improved organisation and representation

• Women empowerment through enhanced entrepreneurial skills

Mainly men and fewer women beneficiaries

Equal number of men and women beneficiaries

Mainly women and fewer men beneficiaries

The implementation of the ARISE component − an output that will be managed by the UNIDO Department of Trade, Investment and Innovation (TII) − will be guided by the Department’s Publication on “Gender equality and empowerment of women”17, emulating for instance the gender approaches of projects like “Projet d’accès aux marchés des produits agroalimentaires et de terroir” (PAMPAT) in Morocco or the Enterprise Development and Investment Promotion (EDIP) Programme.

16 . Given the more abstract and indirect impact on gender of the higher-level interventions under DIPS and ASRISE, descriptions of their gender dimensions are explained in the text, but not presented in this table. The same is done for COME 17 https://www.unido.org/sites/default/files/2017-03/GENDER_brochure_FINAL_online_0.pdf

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A broad range of stakeholder consultations will be undertaken in the ARISE component and all stakeholders will be requested to highlight and feed in gender-specific issues for discussion and action, wherever appropriate. In terms of the capacity building interventions of the ARISE component, specific efforts will be made to maximize the participation of women in foreseen training workshops and to keep track for output-level reporting. In this context, the 2015 “Guide on Gender Mainstreaming UNIDO’s Business, Investment and Technology Services (BIT)for Private Sector Development” offers a practical and modular set of tools to monitor gender balance in capacity building through a set of core indicators.18 Capacity building interventions targeting enterprise upgrading in a wider sense, whether it is through investment promotion, compliance to standards, business plan development or others, will make an effort to maximize the proportion of female-owned businesses in those programmes. Data collection and analysis under the ARISE component will assess the extent of female inclusiveness in human capital development and related internal/external training. This information would provide a clear assessment of the capacity of enterprises in generating employment as well as the nature and extent of employment generation (including female) in respective employment categories. The analysis of this information and data provides an immediate quantitative assessment of gender balance in selected enterprises and industries both at the level of the number of jobs created but also in which categories these employment opportunities emerge. This is expected to underpin policy recommendations on how the gender dimension could be mainstreamed more prominently in the country’s industrial subcontracting and investment promotion efforts. COME component will ensure gender training (Know Gender) for all project personnel, including those under other components.

Environment Environmental considerations will play a central role in the PISID Programme. The support to ISO’s

and enterprises will include awareness of the national and international regulations and aspirations to

a circular economy, or green economy, green enterprises and climate-friendly policies and actions.

DIPS component is ensuring that Annual Surveys of Industrial Production integrated environment-

related questions, such as on method of waste treatment, ownership of EIA certificates, etc…and that

resulting analytical reports and M&E systems provide relevant policy recommendations to address

identified challenges. Sustainable production and consumption will be promoted not only for obvious

environmental benefits, but also as smart economic solutions or pathways to sustainable

development. Re-use and recycling of products will be emphasized alongside proper waste

management and the use of renewable sources of energy will be promoted at all levels. Investment

opportunity profiling work, to be undertaken jointly with the Tanzania Investment Centre (TIC) and

other investment promotion stakeholders, will focus on existing or potential projects scoring high on

Environmental, Social and Governance (ESG) criteria, thereby making them eligible for a potential

new group of investors, namely impact investors19. To ensure the environmental and social

sustainability of the project activities and impacts, environmental and social assessments will be

included in the M&E reports. In case that project related problems are detected or reported causing

environmental and/or social unsustainability, the project team will identify corresponding measures to

address the problems properly. In addition, a more detailed assessment will be included in the project

completion report.

18 See e.g. Annex 8 of the Guide, https://www.unido.org/sites/default/files/2016-

03/new_Guide_on_Gender_Mainstreaming_Business_Investment_and_Technology_Services_for_Private_Sector_Development__3__0.pdf 19 Impact Investing is defined as investments made into companies, organizations and funds with the intention to generate

social and environmental impact alongside a financial return (see Global Impact Investing Network, GIIN).

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Industrial policy Concerning industrial policy, there is a specific component in the PISID which refers to “Data, Industrial Policies and Strategies (DIPS)”. The component includes activities aimed to support the generation of industrial data by including the NBS and OCGS, review and formulation of evidence/based industrial policies (including the finalization of the Zanzibar Industrial Policy and review of current SIDP and IIDS for Mainland), strategies and action plans, including related policy instruments. The project will also produce relevant research and analysis for implementation of FYDPII, and pertinent industrial strategies. With the implementation of “Data, Industrial Policies and Strategies (DIPS)” Component of PISID Programme, capacity of the relevant public authorities for preparation of evidence/based industrial policies, strategies and action plans of will be enhanced. The meso-intervention ARISE will also generate empirical data and analysis on foreign direct investment activity and impact that can be looped back into the process of national and regional policy formulation and investment monitoring. Institutional partners will be enabled to leverage investor data for ad hoc studies, analysis and reports aimed to support policy advocacy initiatives at the national level. Synergies with other UNIDO projects While PISID itself is an integration of projects, synergies with other projects will be sought and exploited at every opportunity. Three among the four components of PISID, namely Data, Industrial Policies and Strategies (DIPS), Augmenting Results for Industrial Support Entities (ARISE) and the Development of Industrial Value Chains and Enterprises (DIVE), are highly linked with results of one contributing to those of the other two. Furthermore, the planning, monitoring, evaluation and reporting of these three components will be through PISID’s forth component namely Coordination Monitoring and Evaluation (COME). This structure will facilitate the capturing of various synergies among the PISID components. The leading and coordination of PISID by the Field Office will facilitate identification and exploitation of the synergies with other UNIDO supported projects in Tanzania, which are ongoing or in the pipeline. Ongoing projects include the Tanzania UN Trade Cluster (SECO) focusing horticulture products for responsible tourism market access, Waste to Energy Applications and Promotion of Bioethanol for Cooking. Projects in the pipeline include the Sustainable Energy and Environment (a theme in the Kigoma Joint Programme), Women’s Economic Empowerment in the Seaweed Value Chain (a theme in the Zanzibar Joint Programme) and Women’s Economic Empowerment in Climate Smart Agriculture (a Joint Programme to be implemented in Dodoma and Singida Regions), as well as a joint FAO-UNIDO programme called the Accelerator for Agricultural and Agroindustry Development and Innovation (3ADI+) to be implemented in the Kigoma region The PISID governance structure will ensure connectivity and synergies among the respective levels/components. Synergies with activities implemented by other UN agencies and Development Partners will also be captured and exploited through the different UNDAP II and Development Partners (DPG) structures in Tanzania. C.3 Results based management (RBM) code and thematic area code

International development goals: RBM code and thematic area code HC2 Adv. Econ. Competitiveness HC21 Invest. Techn. & SME Dev. C.4 Expected Outcomes PISID Programme will contribute to achieving the broader impact of “the economy of United Republic of Tanzania will be transformed for greater pro-poor inclusiveness and improved opportunities for decent and productive employment”.

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C.5 Outputs and activities

The project will be divided into four major outputs, as follows: Output 1: Data, Industrial Policies and Strategies (DIPS)

Output 2: Augmenting Results for Industrial Support Entities (ARISE) through capacity building

Output 3: Developing Industrial Value Chains and Enterprises (DIVE)

Output 4: Project Management, Coordination, Monitoring and Evaluation (COME)

Output 1: Data, Industrial Policies and Strategies (DIPS) This output will address the challenge to further structure and enhance the industrial intelligence system. Among others, UNIDO will support MITI and ZMTIM to produce relevant analysis for policy decision making and upgrade current outdated and unimplemented policies. The objective of this output is to implement a set of activities, mostly geared towards capacity building, that will contribute to enhancing the effectiveness of industrial development-related policies (and related instruments), strategies, and action plans as informed by higher quality evidence-based analysis from relevant industrial statistics and studies. This component should be overarching and closely linked to the other outputs, contributing to improving the effectiveness of the general policy context for the successful roll-out of the other envisaged interventions. The second FYDP centered on industrial development and MKUZA III provide a great opportunity to pitch relevant new industrial policies at the highest level of national development plans, with a better chance to coordinate other relevant sectoral policy instruments in a synergetic rather than conflicting way.

Output 1: Data, Industrial Policies and Strategies (DIPS)

Activity Description Responsibility

1.1 Finalize draft industrial policy and action plan for Zanzibar zMTIM

1.2 Review industrial policies and action plans of Mainland and fill in any gaps

MITI

1.3 Support NBS with the finalization of ASIPs including on SDG9 indicators

NBS, MTIM, CTI, research/academia

institutions

1.4 Strengthen MITI IIU and trade data unit, and linkages to academia/research institutions

MITI, Academia

1.5

Conduct refresher and new trainings for industrial/trade diagnosis and policy making

MITI, MTIM

1.6

1.6 Publish relevant analytical reports, including biennial industrial competitiveness reports and validate, publicize and disseminate them

MITI, zMTIM, CTI,

1.7 Provide training and technical assistance on the M&E framework for FYDPs and on using adopted indicators

MITI, POPC

Output 2: Augmenting Results for Industrial Support Entities (ARISE) through capacity building The objective of the output is to build capacity of selected key Industrial Support Organizations and firms operating in the country for enhancing investment promotion; assurance of products quality and standards; and promoting science, technology, innovation. In order to achieve this objective, the

17

activities will be implemented in close collaboration with stakeholders in the country. A training programme will be developed with participation of selected institutional stakeholders, which have particular importance in capacity development of the country. The main activities under this output will include the following technical support provided to the TIC, ZIPA and other investment promotion and business development support entities. UNIDO's hands-on experience with the various facets of investment promotion, application of new technologies and technology transfer has led to the development of methodological instruments and tools20 such as those related to investment monitoring through investor surveys21, the Computer Model for Feasibility Analysis and Reporting (COMFAR)22, a software that permits the user to simulate the short- and long-term financial and economic situation of investment projects as well as the Subcontracting and Partnership Exchange (SPX) Programme23. The activities would include:

• Support the delivery of more informed FDI monitoring capitalizing on up-to-date enterprise level evidence on FDI activity, structure and economic impact. This would be undertaken through investor surveys, data analysis and the delivery of web-based tools tenable for investment promotion;

• Strengthening of investment promotion practices through ad hoc institutional diagnosis of investment promotion operations in the country and provision of specific training modules in relation to investment opportunity appraisal through COMFAR;

• Extensive support to FDI subsidiary growth prospects through linkages with domestic enterprises through UNIDO SPX Programme delivery and enhancement of investor after-care support;

• Assisting TIC and ZIPA to develop systems which will enhance linkages with key collaborators e.g. TRA and monitoring progress of approved investment projects.

• Providing TIC and ZIPA with TA to prepare investment profiles on available investment opportunities in the manufacturing sector (for example in the development of and production in the proposed Sunflower oil Processing Industrial Park in Dodoma) and the promotion of joint ventures between domestic and foreign enterprises;

Output 2: Augmenting Results for Industrial Support Entities (ARISE) through capacity building

Activity Description Responsibility

2.1

Developing a training programme through a participatory process with selected institutional stakeholders. This training plan will have a gender/youth marker to ensure heightened participation from women and youth.

UNIDO, MITI, zMTIM, TIC, CTI, TCCIA, ZIPA

2.2

Building upon the achievements on the SPX Programme in the previous UNDAP cycle, provide continued assistance for harnessing FDI-local linkages geared at domestic investment promotion.

TIC, CTI, TCCIA

2.3 Targeting main the stakeholder, the Tanzania Investment Centre, several capacity building modules following curriculum of TII's Investment Learning Centre will be rolled out e.g. COMFAR & investment appraisal, investment monitoring, investment aftercare, strategic alliances and partnerships and others

TIC, ZIPA

20 Refer to strategy document, https://www.unido.org/sites/default/files/2017-11/TII_PROMOTING_INVESTMENT_FINAL.pdf 21 Refer to UNIDO Africa Investor Survey, 2011 featuring Tanzania, https://www.unido.org/fileadmin/user_media/Publications/Pub_free/AIS_Report_A4.pdf as well as the Tanzania Investor Survey Report, https://www.unido.org/sites/default/files/2015-12/Tanzania_investor_survey_report_0.pdf 22 Refer to https://www.unido.org/comfar/comfar-software.html 23 Refer to https://spx.unido.org

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2.4 In close coordination with institutional partners as a means of supervised coaching, provide training support to identified groups of SMEs or entrepreneurs (through the DIVE component) on defined modules: business plan development, access to finance, standards compliance, technology tie-ups, marketing and communication, CRM etc.

TIC, SIDO, CTI, TCCIA, TBS/ZBS, TIRDO and

others

2.5 Once local champions at national level are identified, cascade the trainings to the regional, decentralized levels where impact on private sector development is likely to be most direct.

TIC, SIDO, CTI, TCCIA, TBS/ZBS, TIRDO and

others

2.6 Conducting diagnoses for the selected institutions to determine gaps and their capacity development needs (for them or their laboratories to obtain international accreditation and to support enterprises to attain national and international quality and standards for their products)

TBS/ZBS, TFDA/ZFDB,

2.7 Create permanent platform to support public-private sector dialogue at various levels and create collaborative mechanisms with key stakeholders of the DIVE component (meso-micro) and the DIPS component (meso-macro)

MITI, zMTIM, MoA, CTI, TPSF and others

Output 3: Developing Industrial Value Chains and Enterprises (DIVE) This output will address the challenge to plan and implement integrated value chain development actions for the edible oil and other prioritized value chains. The objective of this output is to develop and implement a set of activities, mostly geared towards business development and capacity building but also technology introduction and process improvement that will contribute to adoption and implementation of improved business plans taking on board innovative ways of production, processing and marketing of improved products along the selected value chains. MITI/MTIM and MoA/MANRLF will participate in the planning of the activities and their implementation through focal points and value chain support action teams. This component is closely linked to activities on the meso-level where business development service (BDS) providers shall support business development across various sectors. DIVE will also produce investment-relevant business models for the prioritised value chains that the investment promotion function of ARISE will be able to take on board and promote via investment promotion actions. DIVE will also act as a showcasing platform where industrial and development service providers supported will participate and anticipate knowledge and capacities on how to promote businesses (i.e. responding to enterprises needs) and leverage funding along the value chain after PISID is phased out after 4 years.

Output 3: Developing Industrial Value Chains and Enterprises (DIVE)

Activity Description Responsibility

3.1 Develop value chain development action plans based on integrated value chain diagnostics

MITI, MoA, MTIM, MALNR 3ADI+ team

3.2 Organize gender workshops for the development of gender mainstreaming strategies and their incorporation into the action plans

3ADI+ team, consultants

3.3

Develop business models and investment profiles for enterprises engaging in production, processing and marketing in the value chain

MITI, MoA, 3ADI+ team, consultants, enterprises

3.4

Raise awareness among enterprises regarding technology and product innovation options (based on technological and market foresight)

MITI, MoA, 3ADI+ team, consultants

3.5 Develop organizational models that clarify ownership and operation of value addition entities with participation of local actors (coops, mixed-capital companies etc.)

3ADI+ team, consultants

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3.6 Link enterprises and support them in overall networking among chain actors to facilitate supply management, service provision, standards compliance, access to finance (via bankable business plans), and marketing to buyers.

MITI, MoA, 3ADI+ team, enterprises

3.7 Build capacities among enterprises and provide support to implement business plans including technical and business administration training and introduction of subsidized equipment

MITI, MoA, 3ADI+ team,

3.8 Implement a programme that will post young graduates into MSMEs in the prioritized value chains, identify mentors, build up their skills and advise the host MSMEs on how to upgrade their businesses.

PMO, MSMEs

Output 4: Project Coordination, Monitoring and Evaluation (COME)

PISID will be under the overall management supervision of the UNIDO Representative (UR) who will delegate component management responsibilities to Technical Project Managers who are subject matter specialists. COME will coordinate the PISID activities at all stages including planning, launch, implementation, monitoring, evaluation and reporting. Close PISID monitoring will be conducted to ensure it is implemented according to plan, or adjustments are adopted and implemented in a timely manner. PISID will be evaluated and reported on in line with UNDAP II procedures. During implementation, joint monitoring missions involving members of the Steering Committee and other key stakeholders such as representatives from government, donors, CSOs, beneficiary communities, selected development partners, the participating UN agencies and media houses will be organized at agreed intervals. Provision will be made for at least one independent evaluation, all in line with UNIDO policies and guidelines.

Output 4: Project Coordination, Monitoring and Evaluation (COME)

Activity Description Responsibility

4.1 Inception, launch and coordination/committee meetings UNIDO, MITI

4.2 Monitoring missions, reporting and end of programme evaluation UNIDO, SC members

4.3 Knowledge sharing and visibility through filming, publications, workshops and media events UNIDO, MITI

4.4 Administration and logistical support through staffing, asset acquisition and management UNIDO

4.5 Training of project personnel on “Know Gender” UNIDO

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Timeline of the activities The project will have a duration of 37 months from 1st June 2018 until end of June 2021. The timeline below is proposed for all activities, allowing for reviews and any necessary adjustments to be made every six months.

Activity 2018/2019 2019/2020 2020/2021

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Output 1: Data, Industrial Policies and Strategies (DIPS)

1.1 Finalize draft industrial policy and action plan for Zanzibar

X X X X

1.2 Review industrial policies and action plans of Mainland and fill in any gaps

X X X X

1.3 Support NBS/OCGS with the finalization of ASIPs including on SDG9 indicators

X X X X X X

1.4 Strengthen MITI/zMTIM IIU and trade data unit, and linkages to academia/research institutions

X X X

1.5 Conduct refresher and new trainings for industrial/trade diagnosis and policy making

X X X X X X X X X X X X

1.6 Publish relevant analytical reports, including biennial industrial competitiveness reports and validate, publicize and disseminate them

X X X X X X X X X X X

1.7 Provide training and technical assistance on the M&E framework for FYDP II and FYDP III and on using adopted indicators

X X X X X X

Output 2: Augmenting Results for Industrial Support Entities (ARISE) through capacity building

2.1 Developing a training programme through a participatory process with selected institutional stakeholders. This training plan will have a gender/youth marker to ensure heightened participation from women and youth.

X X X

2.2 Building upon the achievements on the SPX X X X X X X X

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Activity 2018/2019 2019/2020 2020/2021

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Programme in the previous UNDAP cycle, provide continued assistance for harnessing FDI-local linkages

geared at domestic investment promotion. 2.3 Targeting the main stakeholder, the Tanzania Investment Centre, several capacity building modules following curriculum of TII's Investment Learning Centre will be rolled out e.g. COMFAR & investment appraisal, investment monitoring, investment aftercare, strategic alliances and partnerships and others

X X X X X X X X

2.4 In close coordination with institutional partners as a means of supervised coaching, provide training support to identified groups of SMEs or entrepreneurs (through the DIVE component) on defined modules: business plan development, access to finance, standards compliance, technology tie-ups, marketing and communication, CRM etc.

X X X X X

X

2.5 Once local champions at national level are identified, cascade the trainings to the regional, decentralized levels where impact on private sector development is likely to be most direct.

X X

X

2.6 Conducting diagnoses for the selected institutions to determine gaps and their capacity development needs (for them or their laboratories to obtain international accreditation and to support enterprises to attain national and international quality and standards for their products)

X X X

2.7 Create permanent platform to support public-private sector dialogue at various levels and create collaborative mechanisms with key stakeholders of the DIVE component (meso-micro) and the DIPS component (meso-macro)

X X X X

Output 3: Developing Industrial Value Chains and Enterprises (DIVE)

3.1 Develop value chain development action plans based on rapid evaluation and integrated value chain

x

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Activity 2018/2019 2019/2020 2020/2021

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

diagnostics

3.2 Organize gender workshops for the development of gender mainstreaming strategies and their incorporation into the action plans

x x

3.2 Develop business models and investment profiles for enterprises engaging in production, processing and marketing in the value chains

x x

3.4 Raise awareness among enterprises regarding technology and product innovation options (based on technological and market foresight)

x x

3.5 Develop organizational models that clarify ownership and operation of value addition entities with participation of local actors (coops, mixed-capital companies etc.)

x x x x x x

3.6 Link enterprises and support them in overall networking among chain actors to facilitate supply management, service provision, standards compliance, access to finance (via bankable business plans), and marketing to buyers.

x x x x x x x

3.7 Build capacities among enterprises and provide support to implement business plans including technical and business administration training and introduction of subsidized equipment

x x x x x x x

3.8 Implement a programme that will post young graduates into MSMEs in the prioritized value chains, identify mentors, build up their skills and advise the host MSMEs on how to upgrade their businesses.

x x x x x x x x

Output 4: Project Coordination, Monitoring and Evaluation (COME)

4.1 Inception, launch and coordination/committee meetings

X X X X X X X

4.2 Monitoring missions, reporting and end of programme evaluation

X X X X X X X X X X X X X

4.3 Knowledge sharing and visibility through filming, publications, workshops and media events

X X X X X X

4.4 Administration and logistical support trough X X X X X X X X X X X X X

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Activity 2018/2019 2019/2020 2020/2021

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

staffing, asset acquisition and management

4.5 Gender training for project personnel X X

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C.7 Risks and sustainability So far, no major risks are envisaged. For this reason, PISID will conduct a detailed risk assessment at the start of implementation and re-assess the risk at defined intervals as an important aspect of the deliberations of the Steering Committee. However, the already identified general and specific risks and assumptions are as follows: Project Element Risk

Description

Risk Type

Risk Level

Assumptions

Mitigation Measures

Outcome 1: The economy is increasingly transformed for greater pro-poor inclusiveness and improved opportunities for decent and productive employment.

- Private sector productivity gains through technology upgrading may not translate into broad-based pro-poor inclusiveness and leave certain groups marginalized (women, youth)

Beneficiaries

Medium - Economic growth levels and global prices of Tanzania’s main targeted value chains remain favourable to foster pro-poor inclusiveness

- Skills development to go hand-in-hand with technological progress to ensure continued employability of work force

- Monitoring of gender/youth impact at all levels of the programme

Output 1: Data, Industrial Policies and Strategies (DIPS)

- Limited funding and HR allocated by NBS for ASIPs

Governance

Low - NBS continues drawing from GoT and basket fund for ASIP

- Given the revamped DPs’ interest in industrial analysis best strategy is to continue being active in relevant DP Group (e.g. PSD and stats) ensuring allocations to this activity

- IIU not adequately motivated due to limited supervision from MITI management

Governance

Medium - MITI Management involves and motivate IIU to produce required industrial intelligence

- Meeting with MITI PS to review current status and workplan of IIU and ensure IIU staff is adequately motivated by career plans. Alternatively, other institutions should be involved as they showed interest and IIU could be transferred

- Analytical reports end up on shelves with no follow-up on recommendations

Governance

Medium - Action Plans and proposal for review of policy ensue from analytical reports

- More efforts need to be spent disseminating and target awareness activities to policy-makers in Dodoma (e.g. Parliamentary Committees and technical groups).

- Policy recommendations need to be sharpened for easier follow-up

- Reviewed/New industrial Policies are not implemented

Governance

High - Relevant MDAs implement approved industrial policies, strategies

- Industrial policies need to outline clear governance system of coordination for implementation and possibly be mainstreamed at the national development strategy level

- Involvement of the private sector is key

Output 2 Augmenting Results for Industrial Support Entities (ARISE) through capacity

- SMEs not interested in/complacent about internationalization or entering into equity arrangements with foreign entities

Beneficiaries

Medium SMEs ready to from JVs with a foreign partner or to export

All attempts will be made to carefully select from all available SMEs within the operative framework of TIC, CTI, TCCIA and allocate sufficient resources for SME sensitization

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Project Element Risk Description

Risk Type

Risk Level

Assumptions

Mitigation Measures

building

- Absorption capacity of institutional partners (e.g. of the SPX) may be limited in terms of co-funding, allocation of organizations’ personnel resources etc.

Governance

Medium Absorptive capacity of institutional partners like TCCIA, TIC, CTI is sufficient to sustain the SPX and to implement other activities following capacity building modules, for example in relation to project profiling

- Sufficient budgetary allocation to operationalize the SPX Centre in terms of co-funding personnel costs, mobility, communication, events etc., coupled with a phasing out strategy of the project budget contribution according to project tenure;

- Development of revenue strategy for SPX

- Advocating vis-à-vis government for financial allocation to maintain/expand functions of SPX or investment opportunity profiling

Output 3 Developing Industrial Value Chains and Enterprises

- Value chain actors not willing to share necessary information and to cooperate with VC analysts

Beneficiaries

Low - Value chain actors willing to share necessary information and to cooperate with VC analysts

- Rationale behind and importance of value chain diagnostics explained to value chain actors

- Lack of interest of political actors to consider and use results from analyses for policy design

Governance

Medium - Necessary qualified human resources available for establishing analytical tool and interest among political actors to use results from analyses for policy design

- Showcasing and lobbying for the importance of the planned activities

- Value chain actors are not willing to cooperate with other actors

Beneficiaries

Medium - Value chain actors are interested and eager to cooperate with each other

- Awareness raising for advantages of associativity and cooperation will be undertaken

- Insufficient financial resources available for the institutionalization

Governance

Medium - Sufficient financial resources available for the institutionalization

- Showcasing and lobbying for the importance of the planned activities and the achievement of the output

Output 4: Project Coordination, Monitoring and Evaluation

- The PISID implementation timeframe is 37 months, which can be short for some interventions to generate results

Governance

Low - Within this timeframe it will be possible to build institutional ownership to enable absorption of the capacity building interventions for sustainability

- Ensuring sufficient stakeholder participation at all stages to increase time utilization efficiency

Delayed and/or inadequate contributions from implementing partners.

Beneficiaries

Medium - Implementing partners and beneficiaries are expected to provide in kind or hard financial contributions to the

- Expected contribution from partners to be clarified early enough to enable selection of those which are highly committed, with sufficient capacity to contribute.

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Project Element Risk Description

Risk Type

Risk Level

Assumptions

Mitigation Measures

programme.

- Limited access of enterprises to serviced land is a fundamental constraint.

Governance

Medium - Local Government will facilitate access of the enterprises to serviced land as these authorities continue to implement the national agenda of industrialization

- A specific activity has been dedicated under the DIVE component of PISID to address the problem of MSMEs involved in the selected value chains in selected locations to access serviced land.

Sometimes communication within UNIDO and with partners/beneficiaries proves to be challenging, affecting implementation and failure to capture synergies and complementarities among projects.

Governance

Medium - Key UNIDO personnel responsible for PISID appreciates the challenge and are ready to do their best to overcome it.

- Besides coordination function established under the project, an effort will be made to capitalize on UNIDO’s ERP System, Open text, open.unido.org for regular knowledge exchange, advocacy and visibility.

C8. Institutional arrangements & coordination The project will be implemented within the scope of the UNIDO Country Programme or to promote Inclusive and Sustainable Industrial Development in the United Republic of Tanzania in 2018 - 2021. A Steering Committee composed of members from MITI, MITM, PO-RALG, CTI, TAFOPA, ILO (a UN lead agency for the Economic Growth and Employment Outcome group of UNDAP II), UNIDO Representative and SIDA (the donor) will be established and chaired by the Permanent Secretary of MITI. The Steering Committee will guide the PISID planning (e.g. approving new interventions or value chains) and implementation and secure alignment of PISID interventions with government policies and priorities. Two annual PISID Steering Committee meetings are envisaged. There is a sperate component (COME) that places special emphasis on coordination and development communication.

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D. INPUTS

D.1 Counterpart inputs

Governmental Counterpart

Inputs

Ministry of Industry, Trade and Investment (MITI)

• Facilitate timely and effective full Government support throughout the

implementation of the project.

• Contribute to the collection and analysis of available related national data

and material with its own professional and field capacity.

• Provide support to obtain all necessary national and/or regional government

authorizations to carry out field activities.

• Whenever possible, make available, office space with telephone and

internet facilities for use by the experts during the missions and provide

meeting rooms for official meetings and workshops.

• Cover the travel costs and daily allowances of Ministry staff working with

the project and of national institutions participating in national and

international workshops, when not covered by the project

• Support the process of exemption of taxes and import duties for products to

be procured internationally.

• Support the facilitation of visa and working permissions for project-

associated international experts.

• Facilitate the provision of security services during field trips of international

staff and consultants, if the situation so demands

D.2 UNIDO inputs

Project personnel costs will be borne directly by the project. UNIDO will provide inputs of staff time to ensure project supervision/project management coordination and oversight, and contribute to regional and national activities, workshops and meetings. In some countries in the same region, UNIDO has other projects and programmes that could provide useful synergies. UNIDOs inputs will consist of the following:

In kind inputs PISID implementation will be supported in part by UNIDO international Staff based in Vienna (Professional Staff, General Service Staff, HQ based consultants) and UNIDO Representative based in Dar es Salaam. UNIDO National Programme Officer and the Senior Programme Assistant to the UNIDO Representative will also contribute their time and expertise. UNIDO office space and other assets will also support the implementation of PISID. The costs of remuneration and project related travel of national as well as international experts will be borne from project funds. This will include: International Staff Several short-term international experts will be recruited to assist in the implementation of PISID particularly on Outcomes 1, 2 and 3 under the DIPS, ARISE and DIVE components, respectively. An international evaluator will be recruited to lead the Independent Evaluation activity towards the end of PISID implementation.

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National Staff At least one national staff will be recruited for each of the DIPS, ARISE and DIVE components of PISID to support implementation of that particular component. Staff will be expected to be located where most of the component activities are concentrated (i.e. DSM for DIPS and ARISE and Dodoma for DIVE). PISID, under the COME Component, will engage other national staff including a Team Assistant, a Communications Officer and a Driver.

Subcontracts Contracts and agreements will be signed with implementing partners and consultancy firms to implement specific PISID assignments for example the internship intervention under DIVE, as well as the area of development communication. Training UNIDO will provide counterparts with all required training on tools and programme implementation modalities on condition that direct on-site training costs will be covered directly by the counterparts. Training will be provided to a wide range of stakeholders under the DIPS, ARISE and DIVE components of PISID with the main purpose of raising awareness, skills development and building capacity for data/policy analysis, improved delivery of industrial support services, producing and supplying competitive final industrial products with high quality and standards and skills to penetrate markets. Beneficiaries and other project counterparts are expected to contribute to the cost of

training. Project personnel will also participate in trainings, including the online training of “Know Gender’’ to boost their capacities in relevant areas.

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E. BUDGET TOTAL by year (in USD):

Total 2018 2019 2020 2021

Budget line USD USD USD USD USD

1100 Internat. Cons/Staff 1,018,487 229,000 263,162 263,162 263,162

1500 Local Travel 242,490 57,000 63,830 61,830 59,830

1600 Staff Travel 118,363 21,000 32,788 32,788 31,788

1700 Nat. Consult./Staff 733,505 128,679 202,609 201,609 200,609

2100 Contractual Services 548,815 75,000 168,938 148,938 155,938

3000 Train/Fellowsh/Study 305,726 69,000 82,575 77,575 76,575

4500 Equipment 508,630 50,000 152,877 152,877 152,877

5100 Other Direct Costs 261,196 37,439 75,277 75,240 73,240

Net Total budget 3,737,212 667,118 1,042,056 1,014,019 1,014,019

SC-Support Costs (7%) 261,605 46,698 72,944 70,981 70,981

Total (incl. 7% support costs) 3,998,817 713,816 1,115,000 1,085,000 1,085,000

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TOTAL by year (in USD) per component: Output 1: Data, Industrial Policies and Strategies (DIPS)

Total 2018 2019 2020 2021

Budget line USD USD USD USD USD

1100 Internat. Cons/Staff 344,000 74,000 90,000 90,000 90,000

1500 Local Travel 52,000 10,000 14,000 14,000 14,000

1600 Staff Travel 0 1700 Nat. Consult./Staff 92,000 20,000 24,000 24,000 24,000

2100 Contractual Services 90,000 15,000 25,000 25,000 25,000

3000 Train/Fellowsh/Study 58,000 13,000 15,000 15,000 15,000

4500 Equipment 3,000 3,000 5100 Other Direct Costs 19,878 5,187 4,897 4,897 4,897

Net Total budget 658,878 140,187 172,897 172,897 172,897

SC-Support Costs (7%) 46,122 9,813 12,103 12,103 12,103

Total (incl. 7% support costs) 705,000 150,000 185,000 185,000 185,000

Output 2: Augmenting Results for Industrial Support Entities (ARISE) through capacity building

Total 2018 2019 2020 2021

Budget line USD USD USD USD USD

1100 Internat. Cons/Staff 320,000 80,000 80,000 80,000 80,000

1500 Local Travel 116,000 30,000 30,000 28,000 28,000

1600 Staff Travel 40,000 10,000 10,000 10,000 10,000

1700 Nat. Consult./Staff 241,000 48,000 65,000 64,000 64,000

2100 Contractual Services 220,000 50,000 70,000 50,000 50,000

3000 Train/Fellowsh/Study 80,000 15,000 25,000 20,000 20,000

4500 Equipment 20,000 5,000 5,000 5,000 5,000

5100 Other Direct Costs 84,495 14,336 23,411 23,374 23,374

Net Total budget 1,121,495 252,336 308,411 280,374 280,374

SC-Support Costs (7%) 78,505 17,664 21,589 19,626 19,626

Total (incl. 7% support costs) 1,200,000 270,000 330,000 300,000 300,000

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Output 3: Industrial Value Chains: Developing Industrial Value Chains and Enterprises (DIVE)

Total 2018 2019 2020 2021

Budget line USD USD USD USD USD

1100 Internat. Cons/Staff 324,487 35,000 93,162 93,162 93,162

1500 Local Travel 45,490 10,000 11,830 11,830 11,830

1600 Staff Travel 49,363 5,000 14,788 14,788 14,788

1700 Nat. Consult./Staff 242,452 75,000 59,151 59,151 59,151

2100 Contractual Services 221,815 73,938 73,938 73,938

3000 Train/Fellowsh/Study 108,726 20,000 29,575 29,575 29,575

4500 Equipment 473,630 30,000 147,877 147,877 147,877

5100 Other Direct Costs 122,823 11,916 36,969 36,969 36,969

Net Total budget 1,588,786 186,916 467,290 467,290 467,290

SC-Support Costs (7%) 111,214 13,084 32,710 32,710 32,710

Total (incl. 7% support costs) 1,700,000 200,000 500,000 500,000 500,000

Output 4: Project Management and Monitoring: Coordination, Monitoring and Evaluation (COME)

Total 2018 2019 2020 2021

Budget line USD USD USD USD USD

1100 Internat. Cons/Staff 0 - - - 0

1500 Local Travel 29,000 7,000 8,000 8,000 6,000

1600 Staff Travel 29,000 6,000 8,000 8,000 7,000

1700 Nat. Consult./Staff 188,053 25,679 54,458 54,458 53,458

2100 Contractual Services 17,000 10,000 - - 7,000

3000 Train/Fellowsh/Study 59,000 21,000 13,000 13,000 12,000

4500 Equipment 12,000 12,000 - - 0

5100 Other Direct Costs 34,000 6,000 10,000 10,000 8,000

Net Total budget 368,053 87,679 93,458 93,458 93,458

SC-Support Costs (7%) 25,764 6,138 6,542 6,542 6,542

Total (incl. 7% support costs) 393,817 93,817 100,000 100,000 100,000

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F. MONITORING, REPORTING AND EVALUATION The PISID Component Coordinators will monitor the activities on a daily basis and report to the UNIDO Representative and Technical Project Leads (sub-Allotment Holders) through the National Programme Officer. Reports on the different PISID components will be compiled into progress reports for use by UNIDO Representative to report to the PISID Steering Committee, relevant stakeholders in Tanzania and the PTC Department at UNIDO Headquarters. The National Programme Officer will report to the Inclusive Growth TRG of UNDAP II and into the UN Info System (http://tza.uninfo.org) into which the workplans will be uploaded as well. Members of the PISID Steering Committee, and other relevant stakeholders, will carry out joint missions to project sites at intervals which will be agreed to monitor progress and recommend improvements as may be found to be necessary. Independent evaluators will be hired to carry out the PISID evaluation towards its end. The evaluation will triangulate quantitative and qualitative data in considering aspects such as relevance, effectiveness, efficiency, and impact of the interventions. Reporting will take into consideration the reporting cycles of both the government and the UNDAP II. The government fiscal and planning cycle runs from July to June and, normally, government reports are prepared on a quarterly, semi-annual and annual basis. For UNDAP, reporting is on a mid-year and yearly basis. UNIDO will cooperate closely with its partners to develop a monitoring and evaluation strategy, not only to be in line with UNIDO monitoring and evaluation guidelines but also objectively to contribute to the relevant UNDAP II. outputs However, the strategy will include monitoring, field visits, regular provision of reports and data collection, mainly through the COME component. Biannual and annual progress reports will be prepared on the status of results (outputs) and resource mobilization and utilization. At the beginning of each project, a baseline data survey will be conducted in order to develop SMART indicators. A mid-term review (during the 2nd year) of PISID will be carried out in collaboration with national partners. The review will seek to assess the design of the PISID and examine performance against outcomes and assess the actual delivery against planned outputs (whether activities lead to outputs which are being converted into expected outcomes) and whether the strategies and partnerships are effective and efficient. At the end of the fourth and final year, an in-depth independent evaluation as well as an end of programme survey will be carried out in collaboration with (UNIDO) HQ Evaluation Unit (EVAL), the UNIDO Field Office and national partners. The evaluation will be conducted to document lessons learned, behavioral changes, and impact and assess the scope for the way forward. Regular monitoring reports will be shared with all stakeholders including with the UNCT in order to share the relevant outcomes and successes as well as to address remaining challenges within the UN common programme. The monitoring and evaluation system for the initial phase will consist of the following activities:

• Inception workshop: The UNIDO project manager, the Value Chain Analysts, the Agro-Value

Chain Coordinator and the Steering Committee will participate in an inception workshop, to

discuss strategic and operational issues and to endorse the work plan.

• Monthly reporting: The national project expert (NPE) will produce monthly reports and will

summarize activities of the last month and planned activities for the next months. Major

obstacles that might cause a logjam in the project implementation will be included into the

monthly reporting. The monthly reports will be submitted to the UNIDO management team.

• Interim report: Under the guidance of the Technical Project Managers (TPM), the component

NPEs together with the NPO will be responsible for elaborating an interim report, which will be

33

submitted 6 months after project commencement to the project steering committee for review

and approval.

• Annual Report: This will follow the same procedure as for the interim report

• Project completion report: The NPE, under the supervision of the TPM will submit a project

completion report at latest one month before the end of activities. The report will contain,

amongst others, an assessment of the overall project performance during the entire

implementation, a description of the project successes, and the lessons learned.

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Logical Framework

Intervention Logic Indicators Means of Verification Assumptions and/or Risks

Outcome: Greater pro-poor inclusiveness PISID Outcome derived from Outcome I of the Inclusive Growth TRA of UNDAP II: The economy is increasingly transformed for greater pro-poor inclusiveness and improved opportunities for decent and productive employment.

• Quantity of products generated in the targeted value chains increased by 20 % (in comparison to baseline among agricultural producers)

• Value of products generated in the targeted value chains increased by 30% (compared to the baseline estimation)

• At least 40% of participants in the different segments of the targeted value chains are women and 30% youth

Survey among producers Sectoral statistics

Economic growth levels and global prices of Tanzania’s main targeted value chains remain favourable to foster pro-poor inclusiveness

Output 1: Data, Ind. Policies and Strategies Data, Industrial Policies and Strategies (DIPS)

• N. of industrial analytical reports

• N. of reviewed/updated industrial policies, strategies, and related instruments

• N. of industrial M&E indicators adopted and monitored

• N. of industrial surveys conducted

• N. of industrial diagnostics trainings delivered

Project reports Stats and analytical reports Training Reports M&E updates

zMTIM and MITI commits to finalize and implement the industrial strategies/policies using also own resources GOT commits to finalize FYDP II M&E and place staff to monitor it MITI and CTI put aside time and resources for M&E and analytical outputs

Output 2: Ind. Support Entity Capacity Building Augmenting Results for Industrial Support Entities (ARISE)

• # of training packages (incl. manuals) distributed

• # of women trained

• # of bankable proposals for investment developed/

• # of companies (of which # women-owned) assessed or audited/SPX profiling

Project reports Training reports Publications SPX Management Information System

SMEs ready to from JVs with a foreign partner or to export Absorptive capacity of institutional partners like TCCIA, TIC, CTI is sufficient to sustain the SPX and to implement other activities following capacity building modules, for example in relation to project profiling

35

Output 3: Industrial Value Chains Developing Industrial Value Chains and Enterprises (DIVE)

• # of business development plans developed for sustainability/# of enterprises that applied project business models

• % increase in resource productivity and utilization/Increase in value addition among targeted enterprises

• # of products and/or value chains assessed/developed/tested/Production increase among primary producers linked to project

• At least 40% of beneficiaries in the different segments of the targeted value chains are women and 30% youth

Output 4: Coordination, Monitoring and Evaluation

• # and quality of PSC meetings

• # of monitoring visits

• # of coordination meetings or calls among PMs

• Feedback from clients

Minutes of meetings, monitoring and other project reports

The entire project logic of inputs leading to outputs was based on a sound theory of change Cooperation between FO and HQ grows stronger to allow for effective coordination and reporting.

36

G. PRIOR OBLIGATIONS AND PREREQUISITES

None H. LEGAL CONTEXT

The Government of the United Republic of Tanzania agrees to apply to the present project, mutatis mutandis, the provisions of the Standard Basic Assistance Agreement between the United Nations Development Programme and the Government, signed and entered into force on 30 May 1978.