While Tanzania’s overall economic growth trajectory has been in line with its national poverty reduction strategy (termed Mkukuta), the agricultural sector has not proved so dynamic in the past 10-15 years with sector annual growth around 4-5%. The sector nevertheless is key to the country’s growth and poverty reduction prospects, providing a quarter of national GDP and accounting for 75% of rural household incomes.
The Agricultural Sector Development Programme (ASDP) was launched in 2006 to provide a sector wide investment vehicle to deliver the Agricultural Sector Development Strategy (ASDS), and to contribute to the targets of reducing rural poverty from 27% to 14% by 2010, and raising agricultural growth to 10% per year by 2010. ASDP was conceived as a bottom up approach delivered nationally, with 75% of development funds from a multi-donor basket fund allocated to local level support through a performance–based grant mechanism. The basket fund represented an improvement in aid effectiveness away from fragmented projects to an on-budget, government-led approach underpinned by greater policy coherence and use of government planning and reporting systems. ASDP also envisaged greater pluralism in services, an improved regulatory environment and stronger control of resources by beneficiaries. ASDP was conceived to have a 15 year horizon and a first phase of seven years 2006/7 to 2012/13 costing Tshs. 2.5 billion.