Tanzania moves closer to another MCC grant

Tanzania’s Ambassador to the US Mwanaidi Sinare Maajar By Mobhare Matinyi, The Citizen Correspondent Washington DC. The Board of Directors of the United States Millennium Challenge Corporation (MCC) has selected Tanzania as eligible for developing a proposal for a second compact program. In an immediate press release following its day-long meeting on Wednesday, the MCC Board mentioned Tanzania together with other four countries - Liberia, Niger, Sierra Leone, and Morocco, as qualified to work on compact proposals. Considering the tight financial situation facing the US, the selection for the 2013 financial year was extremely competitive as the list of candidates had 62 countries in the low income category, which includes all member states of the East African Community (EAC), and 15 countries in the middle income category. If Tanzania maintains its performance and its proposal is accepted, the country will secure another multi-year compact agreement to fund specific programs targeted at reducing poverty and stimulating economic growth. In addition to the compact agreement the MCC has a threshold program, that is, an agreement between the US Government and an eligible country through which the MCC provides financial assistance for targeted policy reform efforts to enable the country to qualify for a compact agreement. This time only Guatemala was selected for a threshold program. According to the MCC press release, the selection of Tanzania and Morocco for a second compact agreement was based on their performance on the MCC scorecard and as good development partners during the first compact implementation. To ensure objectivity the MCC scorecard uses data from independent third-party sources. The MCC statement added that the second compact eligibility is contingent on successful implementation of the first compact, continued good policy performance and development of proposals that have significant potential to promote economic growth and reduce poverty. The MCC’s Chief Executive Officer, Daniel Yohannes, said at the announcement: “These countries will need to compete for scarce budget resources by maintaining a strong commitment to democratic and economic governance and by developing high-quality, timely compact proposals to promote growth and reduce poverty.” Speaking in Washington DC after the announcement, Tanzania’s Ambassador to the US Mwanaidi Sinare Maajar said that the MCC's decision to award Tanzania a second opportunity to come up with a proposal is an endorsement of Tanzania’s good implementation of the first compact aimed at boosting economic development and poverty reduction. “The fact that only a handful of countries have been selected in a very competitive process demonstrates recognition of Tanzania’s continued reforms in democratic principles, good governance, the fight against corruption and implementation of poverty reduction policies,” noted Ambassador Maajar. The Ambassador said that the challenge was now for Tanzania to formulate a good proposal based on good policies aimed at economic development and poverty reduction. “We must continue our reforms as well as finalize all ongoing projects under MCC One Compact successfully, said the Ambassador optimistically adding that if Tanzania previously produced a proposal that won the largest grant, then it won’t fail this time. The Ambassador observed enthusiastically: “If we did then, I don’t see any reason why we should not do now,” and continued: “I am overwhelmed, happy and so is the president whom I informed immediately upon receiving the good news from the MCC officials”. Until today, Tanzania’s first compact worth $698.136 million, which was signed by President Jakaya Mrisho Kikwete and the former US President George W. Bush in August 2008 in Dar es Salaam, is the largest signed compact followed by Morocco’s $697.5 million. Morocco signed its compact in August 2007. With an opportunity to win a second compact, Tanzania now beats her counterparts in the EAC by far since none of them has signed a compact although three of them have reached the level of threshold programs with Kenya signing $12.7 million and Uganda $10.5 million in March 2007 and Rwanda $24.7 million in September 2008. Tanzania qualified for the first time in a threshold program worth $11.2 million in May 2006 to help the country combat corruption in order to be selected for the compact. None of the EAC member states have gone beyond the threshold program level with Burundi having never achieved anything in the MCC programs. Unlike other EAC member states, Tanzania succeeded in her threshold program culminating in the signing of the five-year deal in February 2008 before entering into force in September 2008. Tanzania’s compact focused on three sectors namely energy, transport and water. By the time Tanzania's compact ends in August 2013, 430 kilometers of high-traffic roads on the Mainland and 35 kilometers of rural roads on Pemba Island are expected to have been completed. In the energy sector the transmission capacity of the electricity grid in seven regions on the Mainland, namely Dodoma, Iringa, Kigoma, Mbeya, Morogoro, Mwanza and Tanga, and on Unguja Island is expected to be increased. Finally, in the water sector the expectations are to increase the water supply by 90 million liters per day in Dar es Salaam and by 15 million per day in Morogoro. So far the MCC has 26 signed compacts with developing countries, 15 of them African countries, bringing to the continent over $5.8 billion, which is about 70 percent of the MCC's total compact portfolio. In the threshold program grants, the MCC has provided $160 million to 10 African countries among 23 developing countries. According to the Washington-based think tank, Center for Global Development (CGD), which correctly predicted Tanzania’s victory, apart from the MCC deals Tanzania is set to receive $571 million in other US development funds next year covering areas such as food security and health.