THE decision by the Board of Directors of the US Millennium Challenge Corporation (MCC) to suspend partnership with Tanzania will not affect projects under the Rural Electrification Authority (REA), the government has clarified.
Energy and Minerals Minister Professor Sospeter Muhongo hinted that REA has never received any funding from MCC as some reports alleged.
“REA has never received even a single dollar from the MCC for implementation of its projects,” Prof Muhongo said in Dar es Salaam yesterday when he met contractors carrying out the agency’s projects in the country.
He pointed out that funds from the USbased foreign aid agency were being directed to road projects, water and electricity – and not projects falling under REA.Earlier yesterday during a meeting with journalists in the city, REA Director General Dr Lutengano Mwakahesya said more than 90 per cent of the projects under the agency are funded by the government through the Rural Electrification Fund.
Dr Mwakahesya was briefing reporters on the progress of REA’s second phase projects, including when they will be completed for the third phase to commence.
The head of the rural electrification agency noted that a number of European development partners have contributed to electrification projects, including Norway through Norad, Sweden through Sida and now United Kingdom through its Department For International Development (DFID).
“We will not be affected in any way by the decision by the MCC board of directors to suspend its partnership with Tanzania. We never received any funds from MCC I... In fact the government is shouldering funding of projects under REA.
We have worked with Norway and Sweden and now UK through the DFID,” he explained. He noted that in the next financial year 2016/17, the 5th Phase government has set aside a big chunk of money in the national budget for rural electrification. He did not disclose the figure.
This week, the MCC board announced that it has decided to cease all activities related to the development of a Second Compact with Tanzania.
The MCC board reportedly deferred a vote on the re-selection of Tanzania for compact eligibility, citing the nullification of election results in Zanzibar and the Cybercrimes Act claiming that the law was used to limit freedom of expression and association.
Economic analyst observed that the suspension of partnership with Tanzania as decided by MCC may not immediately affect the country’s development projects.
The Dean of the UDSM Business School, Dr Ulingeta Mbamba, said it is always good for the country to create its own sources of revenue and refrain from depending on grants from donors.
With President John Magufuli’s initiative to widen the country’s tax base to increase revenue collection, the analysts are of the view that the country will be able to run its business and development projects without depending on funds from donors who have often tagged conditions to their dish-outs.
Dr Magufuli has repeatedly expressed optimism that he aspires to see his government working hard, tirelessly and in whatever means for the nation to prosper and get away from donor dependence, citing abundant natural resources that the country has been endowed with.
The Minister for Finance and Planning, Dr Phillip Mpango, said the government had noted the situation since December last year; and hence the MCC funding was not included in the next national budget for 2016/17 financial year.
The MCC II was targeting energy and mineral projects amounting to about 508 million US dollars, he added. Meanwhile, REA Director General, Dr Lutengano Mwakahesya, said all projects under Phase II are expected to be completed in in June this year for Phase III to commence.