The World Bank Tanzania Digital Foundations Project (P160766) For Official Use Only Project Information Document (PID) Appraisal Stage | Date Prepared/Updated: 06-Apr-2021 | Report No: PIDISDSA23727 Feb 16, 2021 Page 1 of 22 The World Bank Tanzania Digital Foundations Project (P160766) BASIC INFORMATION OPS_TABLE_BASIC_DATA A. Basic Project Data Country Project ID Project Name Parent Project ID (if any) Tanzania P160766 Tanzania Digital Foundations Project Region Estimated Appraisal Date Estimated Board Date Practice Area (Lead) AFRICA EAST 01-Apr-2021 27-May-2021 Digital Development Financing Instrument Borrower(s) Implementing Agency Investment Project Financing United Republic of President's Office - Public Tanzania Service Management and Good Governance (PO- PSMGG), Ministry of For Official Use Only Communications and Information Technology (MCIT) Proposed Development Objective(s) To increase access to high quality internet services for government and citizens, and to improve the government's capacity to deliver digital public services. Components 1. Digital Ecosystem 2. Digital Connectivity 3. Digital Platforms and Services 4. Project Management 5. Contingent Emergency Response Component (CERC) PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFin1 Total Project Cost 150.00 Total Financing 150.00 of which IBRD/IDA 150.00 Financing Gap 0.00 Feb 16, 2021 Page 2 of 22 The World Bank Tanzania Digital Foundations Project (P160766) DETAILS -NewFinEnh1 World Bank Group Financing International Development Association (IDA) 150.00 IDA Credit 150.00 Environmental and Social Risk Classification Moderate Decision The review did not authorize the team to appraise and negotiate For Official Use Only Other Decision (as needed) B. Introduction and Context Country Context 1. Tanzania is a geographically large, diverse, and strategically important lower-middle-income country (LMIC) on the Indian Ocean. Out of 55 African countries, Tanzania is the 5th largest in terms of population, the 9th largest in terms of the size of the economy (e.g., by Gross Domestic Product [GDP] in U.S. dollars), and 13th largest in terms of geographical area. Solid income growth over two decades, averaging 6.5 percent per year, has allowed the country to reach LMIC status as of July 2020. 2. The graduation from low-income status reflects sustained macroeconomic and political stability as well as the country’s rich natural resources endowment and strategic geographic position. Macroeconomic stability has been crucial to Tanzania’s growth; inflation rates have been low—below 5 percent since 2018—and sustainable fiscal and current account deficits have been financed by a combination of domestic and external sources. Over the past two decades, investment has been a key driver of economic growth. The rise in overall investment translated into a sustained accumulation of capital stock and has consistently accounted for roughly two-thirds of real GDP growth. About three quarters of total investment was from private sources. However, this ratio has shifted in recent years with foreign direct investment (FDI) waning for extractives and a more challenging business environment. 3. Coronavirus Disease 2019 (COVID-19) has negatively affected Tanzania’s macroeconomic performance, but the country avoided recession in 2020, contrary to many other countries in the region. Real GDP growth is estimated to have decelerated from 5.8 percent in 2019 to an estimated 2.0 percent in 2020, with per capita real GDP growth turning negative for the first time in over 25 years1. The global economic slowdown adversely affected export-oriented industries, especially tourism and traditional exports, and has caused a drop in foreign 1 World Bank. 2021. Tanzania Economic Update No. 15: Raising the Bar: Achieving Tanzania’s Development Vision . Feb 16, 2021 Page 3 of 22 The World Bank Tanzania Digital Foundations Project (P160766) investment. Fiscal revenues decreased in the face of declines in production, consumption, and imports. Moreover, the pandemic has compounded preexisting challenges in the financial sector; nonperforming loans have risen and the growth of credit to the private sector has decelerated. The project design and phasing have been modified to integrate a digital response to the COVID-19 pandemic, or any other related pandemic that might occur during the course of the execution of the project, with a focus on three main objectives: (a) increasing bandwidth to manage traffic congestion; (b) ensuring continuity of public services; and (c) using digital financial services to support the most-affected businesses and communities. 4. State of poverty eradication in Tanzania. The national poverty headcount declined from 34.4 percent of population in 2007 to 28.2 percent in 2012 and further to 26.4 percent in 2018. Despite Tanzania’s impressive GDP growth between 2012 and 2019, poverty reduction slowed, and growth has become less inclusive. Cumulative growth of 45.5 percent in six years has translated into only a 1.8 percentage point decline in the national poverty rate, implying a poverty-to-growth elasticity of -0.26. The international poverty headcount (US$1.90/day at 2011 Purchasing Power Parities) remained high and unchanged during this period, at 49 percent. High population growth, untapped opportunities for job creation, insufficient skills, and lack of access to digital opportunities have hindered the inclusiveness of economic growth. With a Human Capital Index of 39 For Official Use Only in 2020, Tanzania is ranked at 152 out of 174 economies. 5. Successful transition to middle-income status will require sustaining high growth while offering a more inclusive set of economic opportunities to improve living standards for the majority of Tanzanians. National aspirations laid out in the Tanzania Development Vision (TDV) 20252 are to transition to a middle-income country with a high level of human capital development, characterized by improvements in the quality of livelihood of the people. Tanzania has made improvements in life expectancy, infant mortality, primary and secondary school enrollment rates, gender equality, and access to health, electricity, water, and sanitation. However, there is still a large agenda ahead to sustaining growth over the medium term, improving the inclusiveness of growth to reduce poverty, and strengthening upward economic mobility and economic security for the population. Unemployment, particularly for youth, remains a persistent and growing challenge with approximately 800,000 youth entering the labor force every year. Infrastructure development remains a major challenge, with insufficient roads, inadequate energy generation and distribution networks, and insufficient telecommunication networks. High-skilled jobs have declined as a percentage of the total labor force over the last two decades, where it is expected that greater adoption of digital technologies will stimulate demand. 6. With a natural-resource-based economy, Tanzania is experiencing challenges related to climate change, including unpredictable rainfall, rising temperatures and sea levels, and an increase in extreme weather events. These changes are predicted to worsen in the coming years and will threaten livelihoods, infrastructure, and public health, among other adverse effects.3 According to the World Bank Group’s (WBG’s) Climate and Disaster Risk Screening Report developed for the project, the future climate risk rating is Substantial, while historical and current risk rating is Moderate. 7. TDV 2025 envisages a nation with a strong and competitive economy by 2025. This will involve implementing Tanzania’s second Five Year Development Plan (FYDP II 2016/17–2020/21) with the theme of 2 Although issued in 2016, the TDV 2025 is still considered relevant. 3 https://climateknowledgeportal.worldbank.org/country/tanzania-united-republic. Feb 16, 2021 Page 4 of 22 The World Bank Tanzania Digital Foundations Project (P160766) “Nurturing Industrialization for Economic Transformation and Human Development.�4 This focus on industrialization requires a high level of science, technology, and innovation, with specific emphasis on advanced and modern information and communication technology (ICT) as an enabling tool to reach the intended goals. The United Republic of Tanzania (URT) has moved its government operations progressively to the new capital city, Dodoma (around 450 km from Dar es Salaam), with the Ministry of Communications and Information Technology (MCIT) having moved in 2017. This imposes additional requirements in infrastructure and applications to ensure availability of communication and services between the Dodoma and Dar es Salaam, which remains as the main business city. Sectoral and Institutional Context 8. The digital economy is a key driver of Tanzania’s future growth and prosperity. 5 The country has had a competitive telecommunications market since the early 1990s and currently counts three mobile operators with at least 25 percent of the mobile market by subscribers (Vodacom, Airtel, and Tigo) and three other players with smaller shares (Halotel, Zantel, and Tanzania Telecommunications Corporation Limited [TTCL]).6 Tanzania has made significant progress in improving connectivity and access to digital financial services over the past decade which contributes to economic growth and financial inclusion. According to the Tanzania Communication For Official Use Only Regulatory Authority (TCRA), by the end of 2019, mobile phone (voice) penetration had risen to 47.7 million (82.2 percent). The number of active mobile money accounts at the end of 2019 was around 24 million, and the value of digital financial transactions is equivalent to nearly 50 percent of total GDP. Furthermore, at least half a million people are employed as mobile money agents, which creates both direct and indirect jobs for citizens. Following the launch of 3G/4G services in major population centers, access to the internet, particularly mobile broadband, has recently begun to take off. The TCRA estimated around 26 million users (44.5 percent penetration) at the end of 2019, and the Government is aiming for 80 percent penetration by the year 2025. These achievements have been driven by both public and private investments in telecommunications infrastructure and digital service delivery, particularly within the highly competitive mobile telecom market. In sectors with significant infrastructure deficits, such as energy and transport, the spread of mobile connectivity and financial services is further unlocking opportunities for new services and business models through rapid growth of distributed rural electrification initiatives by the Rural Energy Agency (REA) and ICT innovations in delivery of government services. It is expected that this project will help unlock further opportunities and hence increase government revenue and private sector growth, especially by attaining the target of 80 percent internet penetration by 2025, to which Component 2 of the project will make a major contribution. 9. A number of interrelated factors are constraining private sector investment and competitiveness critical to closing Tanzania’s digital divide and creating a strong foundation for growth of the digital economy. These include: (a) Underinvestment in backbone network infrastructure. Low cost, high quality, and geographically widespread fiber-optic backbone networks are essential for providing telecom services. To date, the National ICT Backbone (NICTBB) has deployed 7,910 km of fiber, far too little for a country of Tanzania’s size, and the network has too few loops to create sufficient redundancy to protect from cuts, especially 4 http://www.mof.go.tz/mofdocs/overarch/vision2025.htm 5 World Bank Group. 2020. “Tanzania Economic Update #14: Just a Click Away: The Potential of the Digital Economy.� World Bank Group. 2019. “Fundamental Drivers of Future Growth in the Tanzanian economy.� 6 In November 2019, a plan was announced to merge Tigo and Zantel. As part of the transaction, the Government of Zanzibar may relinquish its 15 percent stake in Zantel. All of the other operators are privately owned except TTCL which was fully renationalized in 2016. Feb 16, 2021 Page 5 of 22 The World Bank Tanzania Digital Foundations Project (P160766) for cross-border links. High prices for rights-of-way further deter investment.7 Prices for wholesale capacity have recently been reduced to enhance usability and competitiveness. The Government, through the regulatory authority (TCRA), needs to deploy an open access policy to allow competition and to encourage more innovation in the use of existing infrastructures. There are initiatives taken by the Government, such as the metro loops, which have granted operators access and fair use, hence more competition and usability in the infrastructure. The Government needs to allow such initiatives to open up the market for fiber infrastructure also at the backbone and rural levels. (b) Low levels of income, digital literacy, and domestic market size. Consumers of ICT services are highly price sensitive given the low levels of average income in Tanzania. Combined with aggressive competition in the mobile retail market, this has led to low marginal revenues for service providers, which discourages investment in infrastructure and services in rural areas where there isn’t a sufficient customer base to overcome the low margins. 10. The Regional Communications Infrastructure Program in Tanzania (RCIP-TZ) Phase III has played a critical role in increasing connectivity for citizens and the government and enabling digital transactions. The For Official Use Only RCIP-TZ (P111432, 2009–2017) contributed to a dramatic reduction in the cost of wholesale international connectivity, including a 99 percent drop in pricing from US$10,000 per E1 connection in 2008 to US$110 by the end of 2015, with available international bandwidth increasing from 302 Mbps in 2008 to 47,010 Mbps by June 2016.8 These developments have led to lower retail prices and better quality of ICT services for consumers and businesses. An additional 2.6 million people in 1,393 previously unconnected rural villages now have mobile (typically 2G) coverage through public-private partnerships facilitated through the RCIP-TZ and the Universal Communications Service Access Fund (UCSAF), helping to narrow the digital divide. Around 72 Ministries, Departments and Agencies (MDAs) and 77 Local Government Authorities (LGAs) are now connected to high- speed broadband through the Government Network (GovNet), enabling high-quality electronic communications, record keeping, and digital service delivery. 11. Despite this progress, Tanzania is underperforming given its potential for harnessing digital communications and technologies for economic growth, job creation, and service delivery. The country was ranked 167 out of 175 countries in 2018 in the International Telecommunication Union’s (ITU) ICT Development Index, down from 139 in 2011.9 In the ITU’s Global Cybersecurity Index, Tanzania ranked 69th globally in 2018. The ICT sector accounts for a mere 2 percent of GDP, compared with at least 3 percent (and typically more) in similar countries, representing a gap estimated at a minimum of US$450 million for each percentage shortfall. Tanzania also lags its neighbors in terms of take-up of 3G and 4G mobile broadband services. Despite progress in extending rural connectivity, a significant digital divide persists, with at least three million people living in areas still without any mobile signal (according to the Global System for Mobile Communications Association [GSMA]), and more than 18 million people without data coverage, essential to connect to the internet.10 Even in areas with sufficient signal coverage, mobile broadband services remain unaffordable to much of the population, with tariffs for a basic plan (500 MB per month) equivalent to 10 percent of gross national income 7 The Tanzania Urban and Rural Roads Agency (TARURA) charges an initial charge of US$1,000 and an annual charge of US$1,000 per km of fiber. By comparison, there are zero charges in Rwanda while Zambia charges only an initial fee of US$503 per km and no annual fee. 8 As of Dec 2019, total international internet bandwidth to Tanzania had expanded further to 336 Gbits (source: TeleGeography Inc.). 9 ITU (International Telecommunication Union). 2019. Measuring the Information Society. 10 According to data from GSMA, 3G population coverage at the end of 2020 was 69.5 percent and 4G coverage at 37.7 percent. Feb 16, 2021 Page 6 of 22 The World Bank Tanzania Digital Foundations Project (P160766) (GNI) per capita. This is twice the United Nations (UN)-endorsed affordability benchmark of 5 percent or less (UN Broadband Commission). 12. Furthermore, there is a disconnect between the formal education system and the skills required in the market, particularly for women. This is a common refrain from companies in the ICT sector. The formal education system is targeted toward academic performance rather than job-related skills, particularly those required for the success of the digital economy. As a result, companies have to invest heavily to train recruits, and, in many cases, recently trained professionals are poached by competitors or migrate to other countries to seek work; thus, companies need to constantly train new recruits. The World Economic Forum estimated in 2017 that 41 percent of all firms in Tanzania identified an inadequately skilled workforce as a major constraint, compared to 30 percent in Kenya, 9 percent in South Africa, and 6 percent in Nigeria. Furthermore, the country has a 10 percent gender gap in labor force participation. To make an impact, a comprehensive and gender- inclusive digital skills program needs to be developed.11 Other aspects of the gender gap that this project is seeking to address include a lack of sex-disaggregated data, lack of institution capacity focused on gender, gender gaps in device ownership, limitations on women’s access to government digital services, and a lack of awareness of digital services available to women. For Official Use Only 13. However, if the digital economy is to rapidly expand and respond effectively to the COVID-19 pandemic, there are a number of interventions that the Government of Tanzania (GoT) can consider. These include moves to make mobile money and low-value data packages affordable for the poor and to increase participation of citizens in digital financial services. Investment in enhanced coverage of mobile broadband in rural areas is particularly necessary to reduce the digital divide.12 To stimulate progress toward integration in the global digital economy, the Government should seek to attract carrier-neutral data centers and content distribution networks, in addition to ensuring an enabling environment to encourage operators to invest more in underserved areas. As physical trade declines as a result of COVID-19 restrictions, the Government should also move to facilitate digital trade, primarily by passing a strong data protection act13 with supportive regulations and reviewing how intellectual property is protected online, providing an enhancement of the enabling environment for digital platforms and usability. It is expected that the eCommerce Initiative under Subcomponent 1.2c of the project will strengthen the enabling environment for digital trade and allow for better competitive platforms. C. Proposed Development Objective(s) Development Objective(s) (From PAD) To increase access to high quality internet services for government and citizens, and to improve the government's capacity to deliver digital public services. Key Results PDO Level Indicators 14. The PDO-level results indicators are as follows: 11 World Economic Forum. 2017. The Future of Jobs and Skills in Africa. http://www3.weforum.org/docs/WEF_EGW_FOJ_Africa.pdf. 12 It appears that the number of ‘whitespots’ (where cellular signals are not available) may be higher than the statistics reported by operators suggest, based on evidence from alternative sources, such as OpenSignal.com. 13 These policy issues are explored in more detail in: World Bank. 2020. Tanzania Economic Update 14: Addressing the Impact of COVID- 19. https://openknowledge.worldbank.org/handle/10986/33878. Feb 16, 2021 Page 7 of 22 The World Bank Tanzania Digital Foundations Project (P160766) a) IDA-19 Access Indicator: Percentage of the population covered by a mobile broadband network signal (3G, 4G or higher) b) Government Access Indicator: Number of Government institutions benefitting from enhanced internet14 under the project c) IDA-19 Citizen Access Indicator: Individuals (aged 15 and above) using the internet per 100 inhabitants, of which percentage female (a) Digital Public Services Indicator: Number of monthly transactions accessing a public service via internet or a mobile phone 15. The intermediate-level indicators, by component, are as follows: 1. Digital Ecosystem (a) IDA-19 Digital Entrepreneurship Indicator: Increase in the number of digital or digitally enabled businesses15 registered and operational, of which female owned, or with a majority of female employees (b) IDA-19 Gender Indicator on digital skills: Number of people obtaining new digital skills or knowledge For Official Use Only under the project, of which, percentage female16 2. Digital Connectivity (c) Climate Indicator: Increase in the number of people able to receive natural hazard information and emergency warnings, under the project. (d) Network Quality Indicator: Average download speeds (in Mbit/s) 3. Digital Platforms and Services (e) IDA-19 GovTech Indicator: Percentage of the population accessing government services digitally (f) Citizen Engagement Indicator: User satisfaction with delivery of Government digital services 4. Project Management (g) Citizen Engagement Indicator: Percentage of grievances which receive a response within 30 days D. Project Description 16. The Digital Foundations Project contributes to three core enablers of digital development : (a) Digital Ecosystem: strengthening the laws, policies, regulations, institutional capacity, and human capacity needed to promote ICT infrastructure investment, market competitiveness, digital engagement, job creation, and innovation; (b) Digital Connectivity: ensuring access to affordable, high-quality internet services for all citizens, including in rural areas, and for critical government institutions; and (c) Digital Platforms and Services: building the technical capacity, skills, institutions, and local digital infrastructure for the Government to deliver services to citizens and conduct its own business digitally. 14 “Enhanced� internet implies an improvement in access, speeds, or affordability in government institutions which is attributab le to project interventions. 15 Digital or digitally enabled businesses are those that rely on digital technologies (such as mobile phones, internet, or computers) for development and delivery of products and services. “Pure� digital services are those that can be both ordered and delivered i n a purely digital format, such as streaming music. Hybrid digital products are those that may be manufactured offline but can be ordered and paid for online, such as an online bookstore. 16 Also relevant to Component 3. Feb 16, 2021 Page 8 of 22 The World Bank Tanzania Digital Foundations Project (P160766) Component 1: Digital Ecosystem (US$30.6 million) 17. The aim of this component is to make Tanzania a more attractive and competitive place for digital investment and innovation, ensuring that the benefits of digital technology are reaching all citizens and helping lay the groundwork for growth of the digital economy. This will be accomplished by strengthening the many interrelated elements that characterize a thriving digital ecosystem—helping the Government in drafting forward-looking laws, regulations, and policies; building digital skills and capacity of government institutions and youth; prioritizing gender inclusivity and developing a critical mass of innovators, entrepreneurs, and support services; developing a robust local ICT industry that is founded on private investment and is able to deliver e- Commerce services; strengthening cybersecurity capacity to prevent, detect, and respond to cyberattacks and improving data protection and privacy; and working toward closing the digital divide, ensuring that all citizens and businesses benefit from digital development in the long term, especially the poor, women, the elderly, and communities in rural areas. These goals will be supported through two subcomponents: For Official Use Only 1.1. Digital Enabling Environment (US$14.3 million) a) Establishment of a National Center for ICT Professional Development and Innovation (US$11.0 million) 18. The objective of this activity is to develop a national center for ICT professional development and a series of ‘soft centers’, or tech hubs for youth, entrepreneurs, and SMEs in five zones of the country, to promote local innovation in the country. The implementation of this activity will be carried out in collaboration with higher learning institutions (HLIs), vocational training institutions, and the industry, as well as with the Ministry of Education, Science and Technology (MEST) and the Commission for Science and Technology (COSTECH). This subcomponent will require close collaboration with the private sector to assure that newly trained ICT professionals are ready to enter the workforce and have the qualifications and soft skills demanded by private sector companies, including cybersecurity awareness and skills. The project will specifically address the facilitation needed by women to enable them to attend the training, track the involvement of women in benefitting from the training provided, and promote internships for young women under the government- funded program for youth employment. Direct collaboration with the private sector will be sought, including by way of specific on-the-job training programs or internships provided by the soft centers. A national center is planned to be established at the ICT Commission in Dodoma and four soft centers to be housed in training institutions or universities will be established. In principle, the soft centers will be located in four zones namely Northern, Southern, Coastal, and Western zones. Criteria for selection of the centers and modalities for coordination, monitoring, and support of soft centers and Fabrication Labs (FabLabs) are defined in the Project Implementation Manual (PIM). The soft centers will be assisted in developing cost-recovery mechanisms for the services they offer and will need to establish good relations with private sector clients to establish longer-term sustainability, once the project funds are fully used. b) Establishment of FabLabs (US$3.0 million) Feb 16, 2021 Page 9 of 22 The World Bank Tanzania Digital Foundations Project (P160766) 19. This activity aims to establish FabLabs for the refurbishment of ICT hardware and updating of software to enable the reuse and increased lifetime of ICT equipment and to complement efforts to distribute ICT equipment to educational institutions. This will contribute toward the acquisition of low-cost ICT equipment for learning purposes. In addition, establishing FabLabs will reduce e-waste and build capacity in Tanzania for reusing and prolonging the lifespan of ICT equipment, which is an important future strategy for tackling e-waste. Up to three FabLabs would be established and like selection criteria developed in the PIM for the soft centers described above, the FabLabs will need to develop cost-recovery mechanisms and seek private sector support to ensure longer-term viability. c) ICT regulatory scan and review (US$0.3 million) 20. Under this activity, the MCIT, in cooperation with the TCRA and in consultation with the licensed operators and with the help of consultants, will conduct a scan of the legal and policy environment to identify possible gaps that might be hindering the development of the digital economy in Tanzania and to review possible responses. This will target broadband implementation and provide recommendations on any new initiatives that may be necessary to create an enabling regulatory, legal, and fiscal environment for the digital economy. The For Official Use Only activity will look at national statements of digital policy and look at legislation under development, such as on data protection or freedom of information. It will benchmark the status of digital economy development in Tanzania against other countries in the region. Under this activity, the MCIT will also convene with the TCRA and the Ministry of Health, Community Development, Gender, Elders and Children to ensure that gender considerations and the needs of women are integrated into this regulatory scan of the digital economy. The results of this regulatory scan should provide inputs to the implementation of other components, notably the rural connectivity subcomponent (2.2). Activities to be funded under this subcomponent will include consultants and the costs associated with stakeholder consultations. 1.2. Infrastructure to support National ICT Development and e-Commerce (US$16.3 million) a) Enhancing the national addressing and postcode system (US$13.0 million) 21. This is an ongoing activity which will scale up the pilot projects for the National Spatial Data Infrastructure (NSDI), already started and managed by the TCRA, which currently covers 66 wards17. This initiative is expected to cover 711 wards from 37 councils which includes capital cities, strategic areas, central business districts, and other high-revenue-generating areas. The activities under this initiative involve development of digital maps, naming of roads/streets and installation of signage and house number plates; data collection; enhancement/update of the national Address Database, preparation/review of policies and regulations, ICT works, and awareness and capacity building. The NSDI, or digitized map with multiple different layers, will provide a platform on which information can be layered to support key activities such as the national digital identification (ID) and spatial maps for national development, taking into account requirements for data protection. The fieldwork for the mapping would be carried out under the guidance of the MCIT, TCRA, and Tanzania Posts Corporation (TPC). Ground mapping and photography would be supplemented by commercial firms recruited competitively to assist with digital mapping using remote sensing data from satellites and aerial photography. Activities to be funded would include supply of goods, consultancy services, and coverage of 17 http://www.address.go.tz/ Feb 16, 2021 Page 10 of 22 The World Bank Tanzania Digital Foundations Project (P160766) operational costs. b) Development of a national ICT statistical management information system (US$2.0 million) 22. This activity aims to provide complete, accurate, and current statistical data for ICT in the country to support policy decisions for national development. This data would be collected, for instance, by carrying out household ICT surveys, building on the survey carried out in 2017 by the WBG in conjunction with the National Bureau of Statistics (NBS), with funding from the Digital Development Partnership (DDP)18 used by the NBS for national reporting. In addition, it will facilitate investment growth in the ICT sector by providing useful data to potential investors. The funding will be used to develop an electronic management system, establish necessary frameworks for enhancing ICT statistics availability, and commission further surveys for key ICT indicators under the guidance of the NBS. c) E-Commerce initiatives for Tanzania Posts Corporation (US$1.3 million) For Official Use Only 23. This activity is intended to assist the TPC to catch up with recent technological developments and participate more actively in the delivery of e-Commerce. The initiative will later allow integration with global e- Commerce including the Universal Postal Union’s (UPU) Ecom@Africa initiative. The initiative seeks to make Tanzania a hub for e-Commerce in the region and will enhance e-business growth and the participation of citizens in the digital economy. 24. While specific priority activities have been identified, the design of the component is intended to remain flexible, allowing the project to respond to new challenges and opportunities as they arise in this fast-changing sector. There may be a requirement for some additional enabling legislation to promote the development of e- Commerce in Tanzania, and this will be tracked under the regulatory scan in Subcomponent 1.1c. The primary costs to be borne under this subcomponent are the use of consultants for the development of a secure national e-Commerce platform to assess the country’s e-commerce readiness, a scan of the legal and regulatory environment to complement the scan under Subcomponent 1.1c, and hosting of the e-Commerce platform and stakeholder engagement. Component 2. Digital Connectivity (US$65.5 million) 25. This component’s aim is to ensure that, ultimately, all Tanzanians can access high-speed broadband connectivity, and 80 percent by 2025, in line with the Government’s target. Widespread, affordable, and reliable connectivity is an essential prerequisite to providing and accessing digital services for socioeconomic development, and the wider digital economy. In addition to the measures to boost sector competitiveness and private network investment under Component 1, there is a need for more direct investment to meet the connectivity needs of the government and the private sector and to create incentives for the private sector to close the digital divide in internet service provision between urban and rural populations. This component will support the Government’s agenda for industrialization and equitable spatial development, ensuring that all 18 The DDP is a trust fund managed by the World Bank. Feb 16, 2021 Page 11 of 22 The World Bank Tanzania Digital Foundations Project (P160766) Tanzanians, including those in rural areas, have equivalent access to digital services and opportunities. This will be supported through two subcomponents. 2.1 Enhancement of Government ICT Connectivity (US$35.0 million) 26. This subcomponent will support the connection to high-speed broadband of those MDAs, LGAs, and other government institutions that are currently unconnected, or have only slow-speed connections to the GovNet. This subcomponent will build on the successful connectivity program initiated under the RCIP-TZ, under which around 72 MDAs and 77 LGAs were connected to GovNet. This subcomponent aims to connect a further 200 institutions including LGAs, regional offices, regional hospitals, district hospitals, and other MDAs to high- performance internet services. Given that the extension of digital connectivity within the country is paramount, a reliable and robust ICT backbone infrastructure as well as a strong governance, technical, and operational framework and capacity development for the security of the backbone, GovNet, and their connected networks from cyberattacks, hijacking, and breaches is a necessity. In view of this, the project will support the enhancement of GovNet to provide resilience routes as well as the extension of coverage of the national For Official Use Only backbone to areas needed by telecom operators and other communication service providers for provision of services to citizens and businesses. 27. Furthermore, Digital Tanzania will fund the pre-purchase of bulk internet capacity of at least 1.5 Gbps per location for 10 years (i.e., as an ‘indefeasible right of use’ [IRU] contract). The capacity will be used by MDAs and LGAs to facilitate government service delivery. The pre-purchase of bulk international bandwidth is targeted at priority user groups—schools, universities, hospitals, eGovernment use, etc. By supporting these targeted user groups to access cheaper capacity, it will allow them to grow their consumption in line with their actual demand (currently constrained by the prohibitive cost of capacity). This in turn will increase the viability of international infrastructure and in particular increase the usage of submarine cable infrastructure. The pre-purchase of bandwidth would be carried out through competitive tendering for IRU contracts which would be carried out in lots, with one lot covering the provision of international internet bandwidth and other lots covering different regions of the country (for instance, four zones, to be awarded in phases). The preferred technology to connect the government institutions would be fiber-optic cable, but where this is not immediately available, temporary solutions using microwave, satellite, or 4G mobile broadband could be considered. The bandwidth contracts on offer from government should provide an incentive for operators to upgrade their networks to fiber over time. Companies winning the contracts funded by IDA would be required to apply relevant WBG Environmental and Social Framework (ESF) standards for all construction works carried out to extend their networks in the zones served under the project. Although the lease of capacity would extend for ten years, any Operations and Maintenance costs that go beyond the closing date of the project, as well as additional bandwidth purchased after the closing date, would be the responsibility of the GoT. Therefore, steps should be taken to implement cost recovery mechanisms among user MDAs. 2.2 Rural Broadband for Development (US$30.5 million) 28. This subcomponent will build on the successful rural connectivity program supported under the RCIP-TZ by extending data-enabled (4G or higher) network coverage to the three million people currently living in areas of the country that are currently unserved by any mobile cellular signal and will upgrade existing 2G networks Feb 16, 2021 Page 12 of 22 The World Bank Tanzania Digital Foundations Project (P160766) to 4G and above. This will encourage participation in digital economy development and will help those rural areas that have previously been unable to participate in online learning or remote meetings to do so. This program will be conducted in collaboration with the UCSAF and will draw upon lessons learned from the RCIP- TZ program, for instance to refine the delivery mechanisms for incentives to encourage private sector investment in rural areas by using national roaming.19 The activity will also make use of ‘Television White Spaces (TVWS)’ spectrum for enhancing broadband coverage in the underserved areas. This will require a consultant study to provide a thorough spectrum analysis to visualize the scope for using TVWS spectrum in rural areas and thus to provide policy and regulatory guidance on the use of this spectrum and license coverage. 29. The mechanism proposed to be used in this intervention is a ‘reverse auction subsidy’, similar to the one used under the RCIP-TZ and as used in multiple WB programs such as Niger Smart Villages (P167543) and Digital Malawi (P160533). The UCSAF would designate geographical zones (in clusters or lots) where interested bidders (such as mobile operators, cell tower companies, high-altitude platform services, etc.) would be invited to bid competitively for the lowest viable subsidy to capital expenditure (CAPEX) that would be required for them to provide, or upgrade, service in the designated zones. Thus, IDA funding would be used to leverage funds from the UCSAF (using funds contributed to the Universal Service Fund [USF]) and from the private sector, under a For Official Use Only mobilizing funds for development (MFD) approach. Under the RCIP-TZ program, an IDA contribution of US$30 million leveraged private sector investment of around US$70 million and brought around 2.5 million people under mobile signal coverage for the first time. This would be a significant contribution to private capital mobilization (PCM) from the project, but these sums are not included in the data sheet because the amount will only be known once the bidding process is completed and because there is no commitment or requirement from the private sector to contribute a specific amount. A further challenge to extending rural broadband is the fact that mobile phone use is generally in advance of rural electrification. Under the RCIP-TZ, solar power arrays were used with battery storage. Rural electrification initiatives carried out by the REA should be beneficial to the program, and where possible renewable technologies will be used. 30. Activities to be funded under this subcomponent include: (a) a study on the scope for using TVWS spectrum; (b) a study to define the modality to be used for the reverse subsidy auctions, to define a program operational manual to govern awards, and to monitor the implementation of awards; and (c) a series of reverse subsidy auctions, open to competitive bidding, in areas designated by the UCSAF. Winning bidders benefitting from CAPEX subsidies under the project would be obliged to abide by relevant WB safeguards standards in any civil works carried out (e.g., construction of cell towers). Component 3. Digital Platforms and Services (US$50.4 million) 31. Component 3 seeks to enhance the core infrastructure and capacity necessary to support digital public service delivery, increase the efficiency of the Government’s internal operations, and roll out priority digital 19Under national roaming, the company providing rural connectivity in a particular zone would allow other cellular operators to market their own services in that zone without requiring payment of roaming charges. The firm undertaking the investment may typically be granted a short period of exclusivity of 1–2 years before competing firms are allowed into the market. The national roaming mechanism was researched under field trials led by the GSMA in Tanzania, as documented in: GSMA (Global System for Mobile Communications Association). 2018. Tanzania Rural Coverage Pilots: Performance Reports. https://www.gsma.com/mobilefordevelopment/wp-content/uploads/2018/02/GSMA_Tanzania_Jan.pdf. Feb 16, 2021 Page 13 of 22 The World Bank Tanzania Digital Foundations Project (P160766) productivity platforms and public services. Progress has been made in recent years in developing digital services and elements of a shared services platform (mobile services portal, short message service [SMS] gateway, government electronic payment gateway[GePG], etc.); strengthening the e-Government Authority (eGA); and deploying digital productivity tools for government (first phase of e-Office, introduction of one-stop government digital service delivery centers [Huduma Jamii Centers], initial digitalization of records, revenue management, etc.). However, various MDAs and LGAs still operate stand-alone information technology (IT) systems and infrastructure, spending considerable financial and human resources (HR) to develop, implement, and operate each separate digital service. This approach risks creating cybersecurity vulnerabilities in non-standardized approaches. It also creates significant financial, operational, and security liabilities for institutions ill-suited to cope with them. In addition, the Government lacks sufficient HR to meet increasing IT demands and adequate policies, practices, and an effective IT infrastructure to deploy high-quality digital services in a fast, secure, reliable, and cost-effective manner, under a ‘whole-of-government’ approach. ICT skills development under this subcomponent is intended to service government institutions and industrial sectors that are in need of high skills for operations underway in the country. 32. Increased access to affordable, high-quality connectivity will create an opportunity to enhance the way For Official Use Only the government conducts its business and provides services to citizens using digital technologies. Offering public services through mobile and online platforms can create significant benefits to citizens who might otherwise need to travel long distances and spend significant time and resources to access those services. This is particularly important for Tanzania’s rural residents who may lack access to public transport and quality roads but are much more likely to have access to a mobile phone. Likewise, digital platforms offer opportunities to deliver new categories of services and transactions such as digital cash transfers under social protection or payroll schemes, lower administrative and logistical barriers to service delivery, and reduce scope for corruption. This component will include the following three subcomponents. 3.1 Digital Services and Productivity Platforms (US$31.1 million) a) One-Stop Service Centers (Huduma Jamii Center) (US$23.1 million) 33. This activity will seek to improve existing processes and procedures for offering government services to citizens and small businesses by establishing 31 OSSCs (or Huduma Jamii in Swahili), of which up to 10 will be implemented in the first two years of the project (8 on the mainland and 2 in Zanzibar). These centers will be designed for citizens to access public services in a simple, speedy, and seamless manner in one location which may be operated, for instance, by a post office, a community association, or a local entrepreneur. A feasibility study was completed in November 202020 with funding from the African Development Bank (AfDB) and it provided recommendations for the implementation of the activity and the location of the OSSCs. The study notes that, currently, to establish a business, an entrepreneur would need to visit five separate parts of Government (Business Registration and Licensing Agency [BRELA], Tanzania Revenue Authority [TRA], relevant ministry, LGA, and Ministry of Industry, Trade, and Investment (MITI), and visit a bank to make payments at each stage. The aim would be to conduct the process through a single visit to a single government portal facilitated by an OSSC. The OSSC will provide both informational and transactional services. By the end of the project, it is 20URT PO-PSMGG (United Republic of Tanzania President’s Office - Public Service Management and Good Governance). 2020. Feasibility Study for the Establishment of One-Stop-Shop-Centres (Huduma Jamii Centers), in Tanzania mainland and Zanzibar. Feb 16, 2021 Page 14 of 22 The World Bank Tanzania Digital Foundations Project (P160766) planned that up to 32 government services will be provided. The feasibility study proposes using a processing fee (less than 5 percent of the cost of a given service) as a means of financing the OSSC. While these services could also be accessed from a website, the OSSC would provide an intermediary service to assist citizens in navigating the relevant steps, would accept payments, and provide printing and additional services. Measures would be put in place to maximize the protection of private data entered, uploaded, and processed at the OSSCs or on their servers from hacks, breaches, or accidental exposure. 34. In line with the draft budget presented in the feasibility study, the activities to be funded under this activity will include consultant fees, in particular for business process improvement. Other activities to be funded include supply of ICT goods and services and rehabilitation of the existing buildings (for instance, internal wiring and repartitioning of rooms). Training of operational staff will also be required, notably for cybersecurity awareness and good practice. The project will work with existing government buildings and any civil works conducted will be subject to World Bank environmental and social safeguards. b) Digital Economy (US$8.0 million) For Official Use Only 35. This activity, under the Ministry of Finance and Planning (MoFP) and the TRA, a semi-autonomous body under the MoFP, will focus on enhancement of financial/payment systems by strengthening regulations pertaining to digital financial transactions, in collaboration with the Bank of Tanzania (BoT), and enhancing the National Payment System (NPS). Regulations, standards, and guidelines on recognized international practices for the protection of digital payments systems and digital financial services from cybercrime will be adopted, as will measures to protect the privacy of personal data in compliance with forthcoming legislation. By establishing skills and systems that better serve the digital economy, this activity should contribute to increasing revenue for the government. This activity will require consultant services and purchase of ICT goods and services, including software development and cybersecurity strengthening. 3.2 Data Center Infrastructure (US$14.2 million) 36. This activity aims to enhance the National Data Centre Infrastructure by acquiring storage and networking equipment and computing resources for the government shared platform. It also seeks to enable cost-effective sharing of resources, increasing the reliability of electronic services offered by the government and enhancing the storage of government data as well as creating efficiency in sharing and accessing government applications through shared cloud infrastructure. The cybersecurity and physical security of the National Data Center (NDC) and its infrastructure will be assessed at baseline and via regular risk analyses and penetration tests throughout the lifetime of the project, with the recommendations to address vulnerabilities of the facilities and to build the capacity of data center staff supported under the project. Cybersecurity technical assistance will be provided through the project funds, complementing the cybersecurity training planned under Sub-component 3.3b. This activity will require consultant services, purchase of ICT goods and services, and additional training, notably on cybersecurity awareness and good practice, with a focus on good practices in energy efficiency and use of renewable energy. For highly sensitive government data and confidential private data, local data storage hosting on a government cloud may be required. For this purpose, an existing government data center and the recently constructed National Internet Data Center (NIDC) will be used and enhanced with additional security and data storage capacity. Feb 16, 2021 Page 15 of 22 The World Bank Tanzania Digital Foundations Project (P160766) 3.3 Digital Literacy and Capacity Building (US$5.1 million) a) Government ICT cadre training program (US$4.6 million) 37. This activity seeks to build the capacity of ICT professionals within the government for managing and supporting existing and future government ICT systems (supply side) based on an ICT skills gap assessment conducted in all ministries in 2018. The project foresees training in specialized ICT skills for up to 500 ICT experts from the ministries and will also include longer courses (master’s degrees) at top-level universities as well as recognized industry certifications, for instance for cybersecurity, so that government IT officials can serve as Chief Information Security Officers (CSIOs) of their agencies. Synergies will be sought with the National Center for ICT Professional Development and Innovation supported under Subcomponent 1.1 to make sure the appropriate programs are developed to support ICT professionals in the public sector or with interest in government jobs. Civil servants benefitting from training overseas will be required to have worked already for the government for several years and to sign contracts to stay within government for a minimum length of time, or to commit to repaying part of the costs of the training. The selection framework will be prepared and included For Official Use Only in the PIM. This is intended to reduce the level of brain drain from government. Training for e-service operation will be provided in the specific activities of the subproject. b) Citizen Digital Literacy (US$0.5 million) 38. An awareness program intended to raise the level of utilization of online government services will run for the entire duration of the Digital Tanzania Project (DTP). It will include, but not be limited to, social media, TV, and radio programming to promote e-Government services; TV adverts and short video clips; print media campaign; dissemination of publicity materials; and workshops and seminars (for media and the public). The awareness programs will include campaigns directed to the public concerning cybersecurity and the protection of personal data as well as the rights of individuals to determine use of their personal data. Other activities that will be supported are digital forums, conferences, exhibitions, and different digital competitions among youth to strengthen digital involvement and contribution in innovations and creativity. The activity intends to increase digital literacy in terms of increased awareness and usage of digital services by citizens, with specific consultations with the Government and local stakeholders to ensure that women’s engagement with citizen services are accounted for. Activities to be supported under this subcomponent include workshops, consultant services, and training. Component 4: Project Management (US$3.5 million) 39. This component will support essential project management functions, covering primarily staff costs and operational costs. The Government, through the MCIT and President’s Office - Public Service Management and Good Governance (PO-PSMGG), will establish a single project implementation unit (PIU) which will be responsible for supervising operations. The PIU will comprise an overall project coordinator, a digital government services specialist, an ICT technical specialist/technical assistance officer, and specialists in procurement and financial management (FM) as well as safeguards specialists. It will also include funding for strategic communications, monitoring and evaluation (M&E), internal audit, logistics and operational overhead, Feb 16, 2021 Page 16 of 22 The World Bank Tanzania Digital Foundations Project (P160766) gender inclusion, and diversity. Further to this it will include capacity building for beneficiary agencies, such as the UCSAF and eGA, on the preparation of bidding documents and contracts specifically for procurement of ICT, which often includes both goods and services in a single contract. The activities of the PIU will be defined within the PIM which has been developed for this project. Component 5: Contingent Emergency Response Component (US$0) 40. The project includes a Contingent Emergency Response Component (CERC) with an initial zero value, which may be financed during project implementation to allow for an agile response to eligible crises and emergencies. Establishing this component at the program outset provides flexibility to respond to crises as they arise. These could include, for instance, humanitarian crises which require the provision of emergency communications services to replace facilities that have been damaged, or to facilitate emergency humanitarian payments using mobile money. The primary issue at the time of writing is the COVID-19 pandemic which requires an urgent response, for example in the form of additional broadband internet capacity for government offices, especially health centers and hospitals, and for government employees working from home. But there may be other unforeseen pandemics that may arise during the course of project implementation that could be For Official Use Only addressed through the CERC. Eligible situations, scope, and modalities of the CERC will be defined in the PIM. . . Legal Operational Policies Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Areas OP 7.60 No Summary of Assessment of Environmental and Social Risks and Impacts . E. Implementation Institutional and Implementation Arrangements A. Institutional and Implementation Arrangements 41. The primary agencies involved in the implementation of the project are the MCIT and the PO-PSMGG. The MCIT will be the overall lead implementing ministry, while the PO-PSMGG will coordinate the implementation of e-Government-related components (notably Subcomponents 2.1 and 3.2) and participate in Feb 16, 2021 Page 17 of 22 The World Bank Tanzania Digital Foundations Project (P160766) other activities under the project such as OSSCs (Subcomponent 3.1). Digital Tanzania will benefit from the experience and lessons learned of the earlier ICT investment program in Tanzania, the RCIP-TZ. This program, which ran from 2009 to December 31, 2017 concluded with an Moderately Satisfactory rating, and most of its targets were met or exceeded. In addition, the MCIT has a lot of experience in working with the Bank gained from experience in implementing projects in earlier years. The previous PIU for the RCIP-TZ project, which was reporting to both the MCIT and PO-PSMGG, had performed satisfactorily under the RCIP-TZ until its closure on December 31, 2017, though the dual reporting structure caused some delays in gaining internal clearances for procurements. 42. Drawing on the lessons learned from the RCIP-TZ, a number of changes are proposed to the PIU structure and procedures to improve efficiency and reduce implementation risk. These include: i. Designation of a single, dedicated project coordinator for all project activities (previously this was split between different representatives for each institution, and the positions were shared with other government responsibilities). Technical oversight would remain with the relevant stakeholder for each component/activity, while the project coordinator would have responsibility and authority for day-to- For Official Use Only day project management, coordination between the PIU and relevant technical counterpart, oversight of procurement, FM, safeguards, project communications, etc. In general terms, the MCIT is responsible for all of Component 1, partnering with the TCRA for Subcomponent 1.2a and the TPC for Subcomponent 1.2c, and is itself a partner in all other subcomponents. The PO-PSMGG is responsible for Subcomponent 2.1 and all of Component 3 except Subcomponent 3.1b (MOFP). The UCSAF is responsible for Subcomponent 2.2. PIU staff for FM, procurement, safeguards, communications, etc. would likewise cover all project activities. ii. A single designated account (DA) is proposed and will be under the dedicated PIU. Permanent Secretaries (PSs) from both ministries (the MCIT and PO-PSMGG will have decision-making responsibility for the approval of activities that will be under their respective institutions). iii. Recruitment of at least one (1) environmental and one (1) dedicated social specialist to strengthen oversight of safeguards issues; and iv. Strengthening of the PIU with on-call staff who are familiar with WBG procedures for communications, M&E, and diversity inclusion management, given the larger project size and number of activities proposed under Digital Tanzania. 43. Beyond the MCIT and PO-PSMGG, key project stakeholders will be involved in project design and oversight via the Project Steering Committee (PSC). The major project stakeholders are the TCRA, UCSAF, TPC, eGA, the President’s Office for Regional Administration and Local Government (PO-RALG), and the Tanzania COSTECH. In addition, a large number of MDAs figure amongst the list of project beneficiaries, notably the MoFP, the Ministry of Health, Community Development, Gender, Elders and Children, MEST, and the MITI. They will have an opportunity, together with representatives from the private sector and other stakeholders, to participate in a Technical Committee (TC) reporting to the PSC, which will be mandated with specific tasks by the PSC. Terms of reference (ToR) for the PSC and TC will be prepared. Feb 16, 2021 Page 18 of 22 The World Bank Tanzania Digital Foundations Project (P160766) 44. Guidance on priority setting and cross-MDA coordination will be provided by a PSC throughout the lifecycle of the project. The PSC will be established and responsible for monitoring and ensuring that the project is successfully implemented through designated implementation arrangement. The PSC and TC will be chaired by the MCIT, with the PO-PSMGG acting as vice-chair. The PSC will include representatives from various institutions, including but not limited to the MCIT, PO-PSMGG, MoFP, PO-RALG, eGA, etc. It will bring in voices from across government and stakeholder groups and will be leveraged to help support change management with regard to use of the shared digital platform, pre-purchased bandwidth for government use, and the necessity to partner with the relevant line ministries when developing new digital services and applications. The role of the Project Management Team (PMT) will be to supervise the PIU and coordinate PSC meetings. The PMT will comprise the Directors of ICT from beneficiaries and Chief Accountants and Directors of Procurement Units (DPMUs) from the MCIT and PO-PSMGG. Technical Teams/Committees from different institutions will be created with ToRs that engage their mandate in specific subproject activities. Technical teams will report to the PIU and will be under the authority (Managing Directors) of particular Institutions. 45. Data Protection. Large volumes of personal data, personally identifiable information and sensitive data are likely to be collected and used in connection with the management of this project under circumstances For Official Use Only where measures to ensure the legitimate, appropriate and proportionate use and processing of that data do not yet feature in national law21. To guard against potential abuse of that data, the project will incorporate best international practices for dealing with such data in such circumstances. Such measures may include, by way of example, (a) data minimization (collecting only data that are necessary for the purpose); (b) data accuracy (correcting or erasing data that are not necessary or are inaccurate); (c) use limitations (data are only used for legitimate and related purposes); (d) data retention (retain data only for as long as they are necessary); (e) informing data subjects of use and processing of data and allowing data subjects the opportunity to correct information about them, and so on. 46. Private Capital Mobilization (PCM). The project is designed around the principle of MFD, whereby the private sector takes the lead in investment and service provision wherever possible and public funds are only used in the event of market failure. As a consequence, it is expected that the IDA funds will serve to mobilize private capital in a number of ways: a. The primary mechanism used in the project for PCM is the reverse auctions planned under sub- component 2.1 on rural broadband. Under the RCIP-TZ, the reverse auction mechanism leveraged private investment in the ratio of just over 1:2; ie US$30m in IDA fund subsidies leveraged around US$70m in investment in cell towers from mobile operators. The ratio this time is expected to be lower, as the zones targeted are more economically marginal, but still significant. However, as this is an outcome of a competitive bidding process, the anticipated PCM is not included in the data sheet to avoid signaling to the private sector the level at which they should bid. b) A second area where PCM is likely is through the pre-purchase of internet capacity for MDAs under sub-component 2.1. Here, government is acting as an anchor tenant in guaranteeing an income for investors that commit funds to building out their network in secondary cities and rural areas. Again, it is difficult to estimate the incremental additional investment to which the project will contribute, as it will be the outcome of a competitive bidding process, but it is likely to be substantial as IDA funds worth US%35m are committed under this sub-component. 21 New draft legislation covering data protection is under development in Tanzania, but as of March 2021, it had not yet passed into law. Feb 16, 2021 Page 19 of 22 The World Bank Tanzania Digital Foundations Project (P160766) c) Other areas where PCM may be expected include sub-component 1.1, where the funding of the soft-centers and fab labs is likely to stimulate investment from those private companies whose growth is nurtured through these initiatives. Private capital may also be invested alongside public funds in the planned National Center for ICT Professional Development and Innovation. Finally, the public investment in a national addressing and postcode system under sub-component 1.2 should stimulate private sector investment in eCommerce. B. Results Monitoring and Evaluation Arrangements 47. A national ICT data collection survey has been undertaken in preparation for the project. This baseline survey, financed through the Digital Development Platform and using the Survey of Well-being via Instant and Frequent Tracking (SWIFT) methodology, was carried out by the WB in 2018-19. Subsequent surveys are expected to be carried out every two to three years (i.e., twice during the life of the project and once following completion), covering over 1,400 households in rural and urban locations and including Pemba and Zanzibar. The study focused on key indicators related to ICT adoption, usage, and impact and was disaggregated by income For Official Use Only group, gender, type of mobile phone/service, etc. Areas targeted as part of the rural connectivity program will receive specific attention to help inform project design and course corrections. In addition, a Digital Sources of Growth study was commissioned by the Bank in 2019 and formed the basis for a special focus chapter on the development of the Digital Economy in Tanzania in the 14th edition of the Tanzania Economic Update (May 2020). Under the project, a National ICT Statistical Management Information System will be developed (Subcomponent 1.2b), which will allow for improved monitoring of key performance indicators (KPIs) in the sector. 48. It is proposed that the project may also leverage a partnership with United Nations Children’s Fund’s (UNICEF’s) ‘U-report’, or an equivalent reliable and available system, to strengthen real-time, ongoing citizen engagement and feedback. U-Report is a mobile based survey, data collection, and social messaging tool allowing hundreds of thousands of participating members from across the country to provide feedback via mobile phone in response to questions posed. The tool will be leveraged to help identify priority mobile-based digital services for implementation as well as public skills development offerings financed by the project to gauge satisfaction with current service offerings and areas for improvement. C. Sustainability 49. The sustainability of the project should be ensured using private sector led, market-based mechanisms for allocation of resources as opposed to simple grant funding. As an example, the provision of internet access to government MDAs under Subcomponent 2.1 will be allocated through a competitive bidding mechanism that awards long-term supply (or IRU) for internet capacity (typically for 10–15 years, i.e., beyond the closing date of the project) to winning bidders. Similarly, the provision of rural broadband under Subcomponent 2.2 is assured through the use of the ‘reverse auction’ mechanism, whereby a subsidy is offered to the network operator or tower company seeking the lowest level of subsidy to construct and run the infrastructure under a competitive bidding process. In coordination with the PIU, the funding flow to the UCSAF, the universal service agency which collects a small percentage of operator revenue, will guarantee the sustainability of the rural broadband component. It may in the future also be used to support connectivity for schools and hospitals and general broadband development (under Subcomponent 2.1). The phased structure of the project should help reinforce its longer-term sustainability, with lessons learned in earlier phases applied in project design for later phases. Feb 16, 2021 Page 20 of 22 The World Bank Tanzania Digital Foundations Project (P160766) For instance, several of the project components that will be procured in multiple lots (e.g., Subcomponents 2.1 and 2.2) or in multiple units (e.g., the OSSCs in Subcomponent 3.1 and the soft centers in Subcomponent 1.1) can be phased to allow for learnings to be applied in later procurements (learning by doing). . CONTACT POINT World Bank Timothy John Charles Kelly Lead Digital Development Specialist Maria Claudia Pachon Senior Digital Development Specialist For Official Use Only Borrower/Client/Recipient United Republic of Tanzania Mr. Emmanuel Mpawe Tutuba Permanent Secretary ps@mof.go.tz Ms. Sauda Msemo Commissioner – External Finance sauda.msemo@hazina.go.tz Implementing Agencies President's Office - Public Service Management and Good Governance (PO-PSMGG) Dr Laurean J. Ndumbaro Permanent Secretary ps@utumishi.go.tz Priscus Kiwango Director, ICT Services and Project Coordinator priscus.kiwango@utumishi.go.tz Ministry of Communications and Information Technology (MCIT) Dr. Zainabu Chaula Permanent Secretary. MCIT ps@mst.go.tz Feb 16, 2021 Page 21 of 22 The World Bank Tanzania Digital Foundations Project (P160766) Mulembwa Munaku Director, Telecoms and ICT mulembwa.munaku@mst.go.tz Honest Njau Sr. Computer Systems Analyst honest.njau@mst.go.tz FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 For Official Use Only Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects APPROVAL Timothy John Charles Kelly Task Team Leader(s): Maria Claudia Pachon Approved By Practice Manager/Manager: Country Director: Feb 16, 2021 Page 22 of 22