U.S. ties approval of $472.8 mln Tanzania aid to graft fight

Posted on : Monday , 21st September 2015

The United States told Tanzania on Friday it must do more to fight corruption if it wants to receive a $472.8 million financial aid package next year.

Tanzania has made big discoveries of natural gas and hopes to start large-scale production within a decade, but investors in the east African nation of over 45 million people have long complained of graft.

"Despite some efforts to address corruption, it remains a serious concern affecting all aspects of development and government effectiveness," Mark Childress, the U.S. ambassador to Tanzania, said in a statement.

Tanzania won a five-year package of grants in 2008 worth $698 million under the U.S. government's Millennium Challenge Corporation (MCC) program, but the award of a second round of grants will now depend on the government's anti-graft effort.

The MCC board acknowledged Tanzania's steps to reform its institutions, but said more needs to be done before additional aid can be approved.

"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," an embassy statement said.

A group of donors last year withheld nearly $500 million in budget support to Tanzania over corruption allegations in the energy sector after a scandal led to the resignations of three cabinet ministers.

The aid freeze hit the government's budget for the fiscal year 2014/15 and weakened the local currency.

Tanzanian President Jakaya Kikwete said in May that Western donors were setting degrading conditions for aid to his country and he could be forced in time to tell them: "keep your aid".

Kikwete is scheduled to step down after next month's general elections at the end of his second and final term in office.

"We hope to see free, fair and peaceful elections that represent the will of the Tanzanian people," Childress said.

Tanzania, one of Africa's biggest per capita aid recipients, has experienced repeated delays in payments due to donor concerns about corruption, poor governance and the slow pace of reforms.