Millennium Challenge Corporation (MCC)
According to a statement issued by the US embassy in Dar es Salaam
yesterday, the decision to withhold the funds was reached after the
board of directors of the US government’s Millennium Challenge
Corporation (MCC) met to discuss the proposed compact with Tanzania at
its quarterly meeting held on Thursday.
Though the statement did not openly state the reasons behind the
withholding of the funds it was evident that the US government was
concerned with corruption in the country.
In the same statement the US government clearly stated that
Tanzania should pass the control of corruption indicator on MCC’s fiscal
year 2016 scorecard before the Board votes on the compact.
“Following the meeting, the MCC Board released a statement
acknowledging that the Government of Tanzania has undertaken critical
reforms to lay the groundwork for successful implementation of the
compact,” the statement reads in part.
It adds: “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 votes on the compact.”
Control of corruption is such a key indicator for the country to
qualify for the MCC compact fund and several countries have found
themselves failing to meet the criteria.
The compact is designed to increase access to reliable electricity,
strengthen utilities and utility management in the energy sector and
catalyse private sector investment.
In its statement, the MCC Board also expressed its expectation that
Tanzania’s October 25 general election will be free and fair,
consistent with the importance MCC places on democratic rights.
Following the announcement, the US Ambassador to Tanzania Mark
Childress reacted, saying they were pleased the country’s efforts to
institute structural reforms over the past several months to improve the
efficiency, effectiveness and transparency of the energy sector.
“We are pleased by Tanzania’s efforts to institute structural
reforms over the past several months to improve the efficiency,
effectiveness and transparency of the energy sector. As the MCC Board
highlighted, however, despite some efforts to address corruption, it
remains a serious concern affecting all aspects of development and
government effectiveness,” the ambassador said in a statement.
Commenting on the election, Ambassador Childress said they support
the country’s efforts to strengthen its democratic institutions.
“We recognise Tanzania’s record of democratic progress and we
support Tanzania’s continuing efforts to strengthen its democratic
institutions. We hope to see free, fair, and peaceful elections that
represent the will of the Tanzanian people,” he insisted in a statement.
End of last year the government’s image and reputation took a
severe knock as the Tegeta Escrow scandal raged on in which the
Attorney General and two ministers were forced to resign.
In May this year, the US government announced to hold the signing
of the Millennium Challenge Corporation (MCC) compact with Tanzania
pending the government’s action on the scandal, in which over Sh 300
billion was withdrawn from the Tegeta Escrow Account at the Bank of
Tanzania. The value in the MCC facility was by then pegged at around
USD700 million in five years from 2015.
MCC's Board of Directors selected Tanzania as eligible to develop a
second compact in December 2012. The compact was expected to focus on
Tanzania's energy sector. It’s goal was to advance economic growth and
poverty reduction in the country through strategic investments in
transportation, energy, and water infrastructure.
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