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Monday, April 4, 2016

Tanzania Seeks to Stop Donors From Freezing Aid


Tanzania has hired consultants to come up with a mechanism that would prevent donors from withdrawing pledged funds.
Servacius Likwelile, Permanent Secretary at the Ministry of Finance and Planning, told The EastAfrican that consultants have been hired to develop a framework that will bind all development partners and prevent donors from negotiating individually with the government.
"When this is complete and agreed on, there will be no room to change the goalposts in the middle of the game," he said.
The move comes after several development partners who had committed to fund the 2014/2015 budget withdrew $500 million over corruption claims. The government had to struggle to find ways to plug the deficit.
The donors withheld the budget support as a way of pressuring the government to investigate the removal of $125 million from the Tegeta escrow scandal at the Bank of Tanzania in 2013.
However, later on the donor group, which comprised Finland, Germany, Britain, Norway, Sweden, Denmark, the European Commission, Ireland, Canada, Japan, the World Bank and the African Development Bank resumed disbursements after being satisfied with the way the government handled the issue.
So far, four development partners -- African Development Bank, European Union, World Bank and Denmark -- have agreed to finance the 2016/2017 budget through general budget support as well as through other support modalities where some donors prefer sector- or project-specific basket funding.


Dr Likwelile said the tendency of some development partners not to honour their pledges has often affected government expenditure in the past.
The number of donors has dropped from 12 in the last financial year. However, some donors have opted to fund certain projects or sectors directly instead of through general budget support.
The EastAfrican has been informed that the administration in Dar es Salaam was frustrated with donors' unpredictability.
"Some donors prefer to fund certain projects directly, but as a government we prefer funding through general budget support," said Dr Likwelile.
The US recently suspended all projects that had been earmarked for funding under the Millennium Challenge Corporation in Tanzania, over the re-run of a disputed election in Zanzibar and implementation of the Cybercrime Act -- which the US government claims infringes on the freedom of expression, while Tanzania says it is meant to curb terrorism.
The US government and other members of the International Community wanted the two major contending parties in Zanzibar to hold talks.
The Millennium Challenge Corporation said it regrets that the Zanzibar Electoral Commission Tanzania "Moved forward with a new election in Zanzibar that was neither inclusive nor representative". The re-run of the election, on March 20 in Zanzibar, was boycotted by the main opposition party the Civic United Front as well as international observers.
The US government had also sought an assurance from the government that the Cybercrime Act would not infringe on the right to freedom of expression and association. The US cited the arrest of individuals accredited by the National Electoral Commission during the October polls in Dar es Salaam.
The Minister for Foreign Relations, East Africa and International Affairs, Ambassador Augustine Mahiga said the objective of the Cybercrime Act was to curb terrorism internally.
The US Embassy in Dar es Salaam told The EastAfrican that the Millennium Challenge Corporation expected all its member countries to maintain a commitment to democratic rights, which includes protection of freedom of speech and that "any law that contravenes this commitment is of concern."
Suspension of aid
The Tanzanian Foreign Minister said the government regretted the suspension of aid, which would have increased access to reliable electricity, benefiting students in schools, patients and other citizens.
The Millennium Challenge Corporation funds would also have strengthened utilities and utility management, supported Tanzania's to implement plan to reform the energy sector and catalyse private sector investment.

The $698 million worth of funds in the first phase of the Millennium Challenge Corporation, implemented between 2008 and 2013, was instrumental in the construction of 3,000km of power lines, 450km of trunk roads, two water treatment plants and an airport runway.

http://allafrica.com/stories/201604040278.html

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