As the Millennium Challenge Corporation (MCC) Board of Directors meet today in the US, government is yet to resolve the two queries the donor raised as condition for accessing the 1trn/- grant.
Last month, MCC questioned Tanzania’s commitment to good governance and personal freedoms following the Zanzibar political stand-off and implementation of the Cybercrimes Act that saw people being arrested during the October General Election.
In his letter the Deputy Vice President, Department of Compact Operations (Africa), Jonathan Bloom notified the Permanent Secretary in the Ministry of Finance, Dr Servacius Likwelile that the two issues could determine the donor’s final decision that will be made today.
The agenda of today’s meeting, among others included going through the proposed resolution to approve countries for MCC compact assistance and proposed resolution to approve countries for MCC threshold assistance.In an interview with ‘The Guardian’ yesterday, analysts and economists advised that Tanzania should from now focus on reducing donor dependency by boosting its own revenue collection and cutting unnecessary spending, which is possible with the current administration modus operandi.
Dr Oswald Mashindano, the Principal Research Associate from Economic and Social Research Foundation said that if denied the funds Tanzania would be hard hit if the grant was meant to finance ongoing projects.
However, he noted that it would also be a lesson to the country to free herself from donor dependence and look for alternative sources of revenue for the implementation of the country’s projects.
He explained that the country would not get the expected output if the financial flow was withdrawn on the ongoing projects.
“The government will be forced to review the investment and here it will spend resources which are outside of the budget,” he said.
Dr Mashindano further explained that Tanzania had failed to attain some of the Millennium Development Goals (MDG) due to reliance on donors.
“Most of them failed to honour their pledges of 0.7 per cent of GNP as overseas development assistance to developing countries,”
Dr Mashindano said that the government had directed efforts on tapping the potentials of South- South Cooperation improve the tax regime and control capital flights.
The University of Dar es Salaam (UDSM), Prof Delphin Rwegasira said that the government was required to explain on the governance issue raised by the MCC.
He said that Tanzania should be given benefit of doubt because it had done well on the Election of the Union President.
“These are the conditions of the MCC in providing the grants to countries which are trying to improve governance,” he said.
Earlier, Prof Honest Ngowi of Mzumbe University Business School in Dar es Salaam said changes in the economy after the General Election were inevitable
“If Tanzania does not comply with the US conditions and is denied the grant it will be required to find alternative sources of funds to cover the deficit,” the don said, adding:
“Tanzania will need to play its cards well, taking into account the government’s intention to cut spending”.
He said the just concluded General Election was among issues expected to move and shake Tanzania’s economy.
He said the US government wanted to see Tanzania’s commitment in upholding good governance, noting that if a country is donor-dependent it must concur with the given conditions.
An economist, Dr Donath Olomi, Chief Executive Officer Institute of Management and Entrepreneurship Development (IMED) said that if the US government denied Tanzania this amount of money it would affect a number of projects which were expected to be implemented through the grant, such as roads construction and energy.
He said the step taken by the US government was among mechanisms of pressing the country to ensure that it abided by the principles of good governance.
Last month MCC wrote to the government and expressed deep concerns regarding the ongoing electoral crisis in Zanzibar and the recent arrests made under the new Cybercrime legislation.
This was largely an unexpected development as the MCC announced two months ago (in September) that Tanzania had met Washington’s Control of Corruption index demands and qualified for the grant for the next year.
According to the letter which was addressed to the Finance ministry warned that all MCC country partners are expected to maintain a commitment to good governance that would include strict adherence to democratic principles and protection of freedom of expression.
The letter stated that the two events made MCC and its stakeholders to question Tanzania’s commitment to good governance, which could “complicate” the partnership between Tanzania and MCC.
SOURCE: THE GUARDIAN
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