THE AFRICAN BUSINESS FORTUNE MAGAZINE ISSUE #006 The African Business Fortune Magazine | Page 18

THE AFRICAN BUSINESS FORTUNE - TANZANIA

United States agency suspends USD 472m deal with Tanzania

By Correspondent

U

nited States development agency opted last month to suspend
a $472 million compact with
the country – a move that is now likely
to affect Tanzania massively.
Tanzania’s government must now
outline how it will address concerns
about democratic inclusivity if it wants
to reopen a partnership with the Millennium Challenge Corp (MCC).
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.
The board pointed to elections in
semi-autonomous Zanzibar on March
20 that were “neither inclusive nor representative,” and to concerns the country’s Cybercrimes Act is being “used to
limit freedom of expression and association,” according to a statement.
A previous vote on the compact in
December had been deferred over
what the board said were “governance
concerns.”
“I think we’ve been very clear about
what the situation was that led to the
suspension,” said Beth Tritter, MCC’s
vice president for policy and evaluation.
If Tanzania’s government wants to
re-enter into partnership with MCC,
the country’s government must take
the lean, with a plan to address those
specific concerns, Tritter added.

“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,” she said.
Tanzania is a major U.S. development
partner, with nearly $600 million in assistance from the State Department and U.S.
Agency for International Development
planned for 2016.
Most flagship U.S. development initiatives operate in Tanzania, including
Power Africa, President Barack Obama’s
effort to double access to energy in subSaharan Africa.
Tanzania had 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 compact that had been
under consideration was also expected to
support Tanzanian President John Magufuli’s plan to increase rural electrification
in a country that has struggled with consistent access to power and seen economic growth suffer as a result.
MCC’s scorecard, which evaluates countries’ fitness for partnership according to
indicators like “control of corruption,” has
been trending in the wrong direction for
Tanzania, and in December the agency’s
board deferred its vote on Tanzania’s eligibility for a second compact.

18 THE AFRICAN BUSINESS FORTUNE MAY - JUNE 2016

USD 472M
United States Development
Agency suspended to Tanzania
Tanzania is a major U.S. development
partner, with nearly $600 million in assistance from the State Department and
U.S. Agency for International Development planned for 2016.

U.S. Ambassador to Tanzania Mark Childress at that time pointed to politically motivated arrests carried out under the auspices
of the Cybercrimes Act as a reason for the
deferral.
MCC’s decision to suspend the partnership
is consistent with similar decisions it has
made in the past, including with other highprofile partners like Honduras and Armenia,
said Sarah Rose, senior policy analyst at the
Center for Global Development and former
senior development policy officer at MCC.
The elections in Zanzibar could have provided MCC with a “pivotal event,” on which to
base their suspension decision, Rose said.
With slower deteriorating