US withholds over Sh1trn in MCC funding, until.....

RUCCI · 2015-09-19T11:59:06+00:00

The government stands to lose over Sh1trillion ($472.8million) meant for implementing projects in the energy sector following US governments decision to withhold the funds. 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 governments 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 MCCs 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 MCCs 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 Tanzanias 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 countrys 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 Tanzanias 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 countrys efforts to strengthen its democratic institutions. We recognise Tanzanias record of democratic progress and we support Tanzanias 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 governments 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 governments 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. Its goal was to advance economic growth and poverty reduction in the country through strategic investments in transportation, energy, and water infrastructure. Source: The Guardian

Thread starter RUCCI
Start date Sep 19, 2015

RUCCI

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US withholds over Sh1trn in MCC funding, until.....

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