Dar at risk of failing US aid test due to rising corruption

Spiralling corruption could soon lead to Tanzania’s disqualification from a US development aid programme that had earlier allocated $698 million to improve the country’s roads, water systems and electricity supply.

If Tanzania fails to heed a recent US directive to take “firm, concrete steps to combat corruption,” it will join the four other member-states of the East African Community in failing to meet conditions for sharing in Washington’s Millennium Challenge initiative.

Burundi, Kenya, Rwanda and Uganda were each again ruled ineligible for the aid programme in assessments issued last month by the US government’s Millennium Challenge Corporation. Burundi fell short in all the economic, social and governance categories used to measure whether a large amount of funding is likely to be well spent.

Rwanda was given poor grades in the realm of “Ruling Justly,” dropping below US standards for political rights, civil liberties and freedom of information. Kenya and Uganda were both automatically disqualified for failing to stem corruption. None of those four countries has been cleared for the Millennium Challenge assistance during the programme’s 10-year history.

But Tanzania was chosen in 2005 to enter into the largest compact ever approved by the agency. The five-year grant resulted in the construction of over 3,000 kilometres of power lines, 450 kilometres of trunk roads, two water treatment plants and an airport runway.

Two years ago, the US told Tanzania it could begin developing plans for a second compact. And last month, the Millennium Challenge Corporation agreed to provide about $10 million to help Tanzania devise “high-impact investment projects” in the country’s energy sector.

But at a December 10 meeting, the corporation’s board warned that deficiencies in Tanzania’s anti-corruption performance are threatening its eligibility for a second compact. The board alluded specifically to “the implications of the recent case involving Independent Power Tanzania Ltd (IPTL).”

“In order to remain on course for receiving additional development funding, Tanzania also must undertake a series of previously agreed upon structural reforms to improve the efficiency, effectiveness and transparency of the energy sector, and more generally to deal with wider corruption,” the Millennium board said.

The country is still above the programme’s corruption-related cut-off point, but US officials noted that Tanzania’s score on this indicator has declined in each of the past seven years.

The Millennium Corporation “looks to the government of Tanzania to act promptly and decisively on the late-November parliamentary resolutions regarding IPTL,” spokesman Scott Fontaine told The EastAfrican last week.

“The board will continuously monitor and assess Tanzania’s actions over 2015, and is messaging accordingly with the government of Tanzania.”

But no deadline has been set for Tanzanian compliance with US warnings on corruption. The amount of money to be included in a second Millennium compact has also not been specified.
The board said, however, that a new round of assistance would be likely focus on Tanzania’s power sector, including investments in infrastructure as well as policy, regulatory and institutional reforms.

The $10 million already approved for compact planning will help identify ways to improve the performance of the Tanzania Electricity Supply Co and the Zanzibar Electricity Corporation. Projects aimed at expanding access to electricity in rural areas will also be formulated, the Millennium Corporation said.

The US programme has provided a total of nearly $9 billion in assistance to 28 developing countries in the past decade. Other sub-Saharan African countries cleared for Millennium compacts include Benin, Burkina Faso, Cape Verde, Ghana, Lesotho, Madagascar, Malawi, Mozambique, Namibia, Senegal and Zambia.