MCC board reviews Tanzania’s eligibility for Sh1tr US funding

Monday March 28 2016


By Syriacus Buguzi @buguzi

Dar es Salaam. Whether Tanzania will get nearly Sh1 trillion in development support from the Millennium Challenge Corporation (MCC) this year will be determined today when the MCC board meets in Washington.

Uncertainty has clouded the possibility of Tanzania being provided with the funds since last December, raising fears that this could adversely affect the government’s plans to implement rural power projects, among other key development plans.

Tanzania will be high on the agenda of today’s meeting of the top MCC decision makers.

During its previous quarterly meeting, the MCC board – an organ that decides on behalf of the US President – deferred a vote on Tanzania’s eligibility for the funding, reportedly over governance concerns.

No specific reasons were cited but in the days following the decision, the MCC expressed concern about the political impasse in Zanzibar as well as arrests linked to the anti-cybercrime law in the run-up to, during and immediately after the October 25 General Election.

Lesotho, which recently faced political unrest following a power struggle, has also suffered a similar fate.

The US ambassador to Tanzania, Mr Mark Childress, commented on the MCC’s decision in a  statement.

“The board’s governance concerns reflect long-standing MCC principles. The nullification of election results in Zanzibar halted an otherwise orderly and peaceful electoral process. The use of the Cybercrimes Act of 2015 during the elections to arrest individuals accredited by the National Electoral Commission inhibited fundamental freedoms of expression and association,” Mr Childress said.

The US envoy, however, said the board might review Tanzania’s eligibility after expressing his satisfaction with President John Magufuli’s clampdown on corruption.

“I remain hopeful that the government of Tanzania will take steps to resolve MCC’s governance concerns in the near future. The Board could then vote to re-select Tanzania and approve compact development (funding).”

Tensions in Zanzibar have subsided following the controversial March 20 repeat elections, and it remains to be seen if Tanzania will this time around be considered afresh for the American support.

If considered, Tanzania would be able to use the funds to implement key road, water and power projects.

However, the Kinyerezi II power project, which was expected to be funded through the MCC support, has already been rolled out.

Tanzania was on course to landing the $472 million (Sh990 billion at current exchange rates) second compact to become the only country in Africa to have received such support from the US twice in a row.

In 2008, Tanzania was among a few countries in the world that were selected for the first compact funding and received a record $700 million (Sh1.47 trillion).

The government has been optimistic about the second round process after the country passed initial stages of vetting.

In November 2014, the government and MCC signed an agreement for the release of $9.78 million (Sh19.5 billion) to be used in research, design and development of the second compact programme.

However, concerns were later voiced about spiralling levels of grand corruption that threatened to derail the plan.

President Kikwete intervened during a visit to New York last September and told the MCC board that the government was determined to root out corruption.

However, another impediment emerged after results of elections in Zanzibar were controversially annulled, ostensibly because of widespread irregularities.  The US was among international powers that strongly condemned the decision.

Washington and other development partners have also questioned the application of the new cybercrime law, demanding that the government clarify its wider objectives after a number of people were arrested during the General Election.

Critics said the law as interpreted violated people’s basic rights and freedoms.