Finance Minister: Tanzania "not surprised" by US aid cut

Finance Minister Philip Mpango says that the government had anticipated the move and was prepared with alternative funding.

The Tanzanian government has said the decision by American agency Millennium Challenge Corporation (MCC) to cancel $472 million (about Tsh1 trillion) in funding to the country did not come as a surprise.

Finance Minister Philip Mpango told The Citizen yesterday that the government had anticipated the move and was prepared with alternative funding.

The MCC funding was meant to implement various development projects in energy, road and water sectors.

The MCC board of directors which sat in Washington on Monday voted to suspend the agency’s partnership with the government of Tanzania over the Zanzibar election and application of the Cybercrimes Act run counter to this commitment.

Dr Mpango said the State is currently focussed on sourcing funding for its projects from domestic sources.

“We weren’t surprised at all because we were prepared for whatever the outcome. We will implement those project using local sources of fund and the support of from other development partners,” he said.

He added that since President John Magufuli took office, the government has put emphasis on revenue collection with the aim of cutting dependence on donor funds to implement of development projects.

However, the government said it is still waiting for official communication from MCC to determine the way forward.

“After receiving the official communication we will engage in discussion with MCC in order to know why the board has made that decision and what we (the government) should do in order to be reconsidered,” said Dr Mpango.

Meanwhile, Foreign Affairs and International Corporations minister Dr Augustine Mahiga said the government was disappointed by the MCC decision.

Dr Mahiga said “energy sector is very important for development of the community and now that MCC has suspended its funding wananchi most of projects to supply energy especially to rural areas will suffer.”

The Tanzania Electric Supplying Company Limited (TANESCO) -whose projects stand to suffer following the move - says the World Bank and African Development Bank (AfDB) have agreed to finance the projects that were to be implemented using the MCC fund.

Tanesco Managing Director Felischemi Mramba said the World Bank has agreed to fund a project to supply power in urban areas while AfDB has agreed to fund project to connect Tanzania and Zambia.

However, as the government is allaying fear on the impact of the MCC board decision, analysts fear that the move will have serious repercussions on the Tanzanian economy.

Professor Honest Ngowi, an economist from Mzumbe University, said since the money were intended to fund various development projects in key sectors - which would have speed up development in other sectors - the economy will suffer the most.

Prof Ngowi’s sentiments were echoed by Civic United Front (CUF) director of information and public communication Mr Ismail Jussa who accused the ruling party (CCM) of making decision (with regard to Zanzibar election) which will affect the lives of many Tanzanians especially those living in rural areas.

Mr Jussa added that even if Tanzania wants to become financially independent it shouldn’t deny other people’s rights or violate principles of democracy while doing so.

“I have heard some people who affiliated to the ruling party playing down the MCC board decision by claiming that Tanzania shouldn’t be interfered in its internal affairs; but they should remember that patriotism isn’t about denying other people’ rights,” said Mr Jussa, who was referring to the annulled Zanzibar election which CUF claimed it won.

Effort to have the ruling CCM comment on the development before going to press proved futile yesterday as its spokesperson Christopher Olesendeka’s phone went unanswered.