U.S. suspends 470 mln USD energy funding to Tanzania

The United States government funding arm - the Millennium Challenge Corporation (MCC) - announced on Tuesday it will not release to Tanzania 470 million U.S. dollars for funding electricity projects.

MCC said in a statement that it reached the decision to suspend funding of the power projects citing the nullification of election results in Zanzibar and Tanzania's disregard for overseeing a prompt, fair and peaceful conclusion of the electoral process.

On March 20, 2016, Tanzania moved forward with a new election in Zanzibar that was neither inclusive nor representative, despite the repeated concerns of the U.S. government and the international community, said the statement.

Last week the Zanzibar Electoral Commission (ZEC) declared incumbent Zanzibar President Shein from the ruling party - Chama Cha Mapinduzi (CCM) - winner of the controversial re-run presidential polls after he had garnered 299,982 which was 91.4 percent.

The re-run polls were held after results of the October 25 elections were annulled, three days after the polls, by the ZEC chairman Jecha Salim Jecha on what he described as massive irregularities.

The main opposition party - the Civic United Front (CUF) - boycotted the polls, insisting that it had won in the October elections, and called on its supporters not to vote, something that could have been connected with the poor turnout.

"The government of Tanzania has also not taken measures to ensure freedom of expression and association are respected in the implementation of the Cybercrimes Act," said the MCC statement.

The statement said the MCC Board of Directors determined that the government of Tanzania has engaged in a pattern of actions inconsistent with MCC's eligibility criteria, and voted to suspend the agency's partnership with the government of Tanzania.

"MCC will therefore cease all activities related to the development of a second compact with Tanzania," said the statement.

U.S. Ambassador to Tanzania Mark Childress said: "I fully support the (MCC) Board's decision to suspend development of a second compact."

However, he said the U.S. and Tanzania have long-standing and deep relationships across many sectors.

"As Tanzania's largest bilateral development partner, we will continue our work together to improve health and education, promote economic growth, and advance security," said the U.S. envoy.

On Sunday, Tanzanian President John Magufuli appealed to Tanzanians to work hard in order to enable the east African nation to lessen foreign donor dependence.

The head of state was speaking at a special Easter mass at the Azania Front Lutheran Church in the commercial capital Dar es Salaam.

"Tanzanians can stop relying on conditional loans from foreign donors if they cultivate a culture of working hard," said Magufuli.

Since he took power in November 2015, President Magufuli has taken a number of austerity measures aimed at cutting down government spending and boosting government revenue collection.

He said these measures, including banning foreign travels for civil servants and enhancing tax collection, were aimed at improving provision of social services like free education and health and lessening donor dependence.

In February 2015, the Minister for Finance and Planning, Phillip Mpango, told Parliament in the country's political capital that the government intended to cut donor dependence to three per cent in the next budget from the current 6.4 percent.

He said the reduced dependence would be compensated by increasing domestic tax revenue by 15 percent, borrowing commercially, cutting wasteful spending, and reviewing tax exemptions. Endit