Financial aid hinges on anti-corruption effort

Dar es Salaam, Tanzania - 2014-12-12 USD and TZS in Dar es Salaam, Tanzania, on December 12, 2014. Photo by Daniel Hayduk

Over $400 million USD in financial aid from the United States hinges on Tanzania cleaning up it’s corruption which remains a ‘serious concern.’ Photo by Daniel Hayduk

If Tanzania wants to receive a $427.8 million USD (927 billion TSH) in financial aid from the United States’ Millennium Challenge Corporation (MCC), it will need to prove it’s serious about fighting corruption.

“Despite some efforts to address corruption, it remains a serious concern affecting all aspects of development and government effectiveness,” says US Ambassador to Tanzania Mark Childress.

Childress says the US and the MCC, which is a US government agency, are pleased by Tanzania’s efforts to institute structural reforms in the energy sector in recent months.

“While welcoming those reforms, the board expressed continued concern regarding corruption in Tanzania, and agreed that Tanzania must pass the control of corruption indicator on MCC’s fiscal year 2016 scorecard before the Board will vote on the compact.”

According to Reuters, President Jakaya Kikwete says donors are setting degrading conditions on financial aid and he may be forced to tell them: ‘keep your aid.’

The cash would be used to increase access to reliable electricity, strengthen utilities and utility management as well as reforming the energy sector and catalyzing private sector investments.

In 2008, Tanzania received a five-year grant package worth $698 million USD from the MCC.

In 2014, donors withheld approximately $500 million USD amid corruption allegations in the energy sector.

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