MCC: This is what Tanzania must do to lift aid suspension

By The guardian reporter

                                               Beth Tritter, MCC vice-president

 The government has been told to outline how it will address concerns about the disputed election re-run in Zanzibar if it wants to reopen a partnership with the Millennium Challenge Corporation (MCC) which has cancelled financial aid worth 1 trillion/- to the country, a senior official of the US agency said yesterday.

 

The MCC said Tanzanian authorities must clearly explain how the country plans to fix the Zanzibar problem in order to unlock the agency’s hefty aid package.

“I think we’ve been very clear about what the situation was that led to the (aid) suspension,” said Beth Tritter, MCC’s vice-president for policy and evaluation, in an interview with  Devex, a media platform for the global development community.

 

"If Tanzania’s government wants to re-enter into partnership with MCC, it must take the lead, with a plan to address those specific concerns," Tritter added.

She said Tanzania has to guarantee political inclusivity if it wants MCC aid money suspended largely due to the March 20 polls going ahead despite a boycott by Zanzibar’s main opposition party, the Civic United Front (CUF).

 

“We don’t provide checklists at MCC. We leave it to governments to demonstrate how they’re going to show their commitments to these principles, and so we’ll have to look at what we get from the government of Tanzania,” Tritter explained.

 

At its quarterly meeting on March 28, MCC’s board of directors decided to cease “all activities related to the development of a second compact” for assistance to Tanzania. 

 

The board cited the elections in semi-autonomous Zanzibar that it described as “neither inclusive nor representative,” and concerns that Tanzania's Cybercrimes Act is being “used to limit freedom of expression and association,” as its main reasons for the decision.

 

A previous vote on the MCC compact to Tanzania in December was deferred over what the board described as “governance concerns” over corruption allegations linked to the Tegeta escrow account scandal.

 

Some local politicians have criticised MCC for appearing to shift the goal posts after initially citing corruption as its main worry, but then shifting focus to the Zanzibar elections and the Cybercrimes law after the country appeared to have passed the graft test.

 

Tanzania is a major US development partner, with nearly $600 million in assistance from the State Department and US Agency for International Development (USAID) planned for 2016. 

 

There are a number of flagship US development initiatives currently operating in the country, including Power Africa – a part of President Barack Obama’s efforts to double access to energy in sub-Saharan Africa.

 

Tanzania has also been a longtime partner of MCC, signing what was at the time the largest compact in the corporation’s history in February 2008 — nearly $700 million aimed at increasing access to electricity.

 

The new MCC package under consideration was also expected to support President John Magufuli’s plan to increase rural electrification as the country continues to grapple with the problem of ensuring consistent access to power as a key component of genuine economic growth.

 

But MCC’s scorecard, which evaluates countries’ fitness for partnership according to indicators like “control of corruption,” has apparently been trending in the wrong direction for Tanzania, with the country’s eligibility for the second compact now being so seriously questioned. 

 

Back in December, the US ambassador to Tanzania, Mark Childress, mentioned politically-motivated arrests carried out under the auspices of the Cybercrimes Act as a reason for the initial deferral by the MCC board.

 

According to Sarah Rose, a senior policy analyst at the Center for Global Development and former senior development policy officer at MCC, the suspension of the partnership with Tanzania altogether is consistent with similar decisions that the corporation has made in the past with other leading partners like Honduras and Armenia.

 

The elections in Zanzibar could have provided MCC with a “pivotal event,” on which to base their latest suspension decision, Rose said. With slower deteriorating governance issues — like worsening corruption or challenges to civil liberties — it can be harder to judge exactly when a red line has been crossed, she added.

 

The MCC’s aid suspension to Tanzania was closely followed by another announcement that some members of a group comprising 14 other western donor entities had also decided to withhold hundreds of millions of US dollars in general budget support (GBS) for the country.

 

According to the permanent secretary in the Ministry of Finance and Planning, Servacius Likwelile, only four members of the GBS group are still on board thus far - the European Union (EU), the World Bank, the African Development Bank (AfDB), and Denmark.

 

The other group members - Finland, Germany, Britain, Norway, Sweden, Ireland, Canada, and Japan - did not give reasons for their withdrawal, which effectively leaves President Magufuli's government having to deal with a substantial external aid shortfall just months before it unveils its maiden budget for fiscal year 2016/17.

 

Still, the Ministry of Finance and Planning said the aid withdrawals were not likely to affect implementation of the upcoming budget, which starts on July 1. This is despite Tanzania having been one of Africa's biggest per capita aid recipients for many years, depending heavily on donor support for development projects.

 

President Magufuli on Tuesday this week responded to the MCC aid suspension by reiterating his call for Tanzanians to work harder and harder towards ending the country’s dependence on foreign aid money which usually comes with “conditions”.