This study assesses the Effectiveness of Donor Funds in Tanzania. This study was based on a case study of National Council for Technical Education (NACTE) World Bank Project. The study was guided by the following specific objectives: To determine the kind of funding that is most effective in helping an institution like NACTE, to explore the essential characteristics of donor funding effectiveness in attaining their capacity improvement goals, to determine the extent of harmonization in the planning and program implementation of foreign donors vis- a -vis local programs, to recommend best practices with respect to instituting donor-recipient funding and mechanisms to attaining optimal results. To answer the above questions, a number of qualitative methods and techniques were used to collect and analyze data based on the conceptual framework. Among other techniques that were used they included; focus group discussions with project beneficiaries, observations of projects, interviews with different categories of respondents depending on their roles and level of involvement in the implementation of projects but also their experience in the implementation of donor aided programs. Simple random sampling and purposive sampling methods were used to choose and determine the characteristics of the respondents as well as groups that participated in the study. The findings indicate that the research objectives have been met. This research recommends that the recipient countries must be given more bargaining power to ensure their development priorities take central stage. These and many other challenges revealed in this study are a matter of policy makers to work on. The findings from this study will be beneficial in terms of adding to the existing body of knowledge and assist policy makers to make the appropriate decisions regarding donor funded projects.

A Dissertation Submitted to Mzumbe University, Dar es Salaam Campus College in Partial Fulfillment of the Requirements for the Award of the Degree of Master of Science in Accounting and Finance of Mzumbe University