Millennium Challenge Account - Tanzania

The Government of the United Republic of Tanzania and the Government of the United States of America through the Millennium Challenge Corporation (MCC) Board of Directors have agreed to forge cooperation by implementing a five year broad based Millennium Challenge Account (MCA) Compact for Tanzania.

The Compact is designed to contribute to a transformational change by addressing key impediments to economic growth. The Compact is based on the National Strategy for Growth and Reduction of Poverty (MKUKUTA) for Tanzania Mainland and the Zanzibar Strategy for Growth and Reduction of Poverty (MKUZA).
 
The MCA-T Compact was developed through a consultative process that involved all key stakeholders including Parliamentarians, Government Ministries, Departments and Agencies (MDAs) and the MCC Transaction Team. Others were, Research and Academic Institutions, Civil Society Organizations (CSOs), the Private Sector, Gender, Advocacy Groups and Development Partners. The overall goal of the Compact is to stimulate a broad based economic growth, enhance income earnings of households, raise quality of life and social welbeing through improvement of transport, energy and water infrastructure. 
 
MCC shall provide financial assistance under the MCA to implement the Compact. On the other hand, the Government of Tanzania has to establish an Independent Accountable Entity to manage the implementation of the Compact in consistent with MCC guidelines. This entity shall have the authority and responsibility to oversee implementation of the MCC funded projects and their various components and activities. These include allocation of resources, oversee and implement a financial plan, approve expenditures and procurements, continue with the consultative process, and be accountable for the Compact results to the Government of Tanzania and MCC. 

 

On 17th of February 2008, President Jakaya Mrisho Kikwete and President George W. Bush signed a compact agreement committing the Government of the United States of America to grant US $ 698,136,000 to the Government of the United Republic of Tanzania to support development projects. This is a large National Program to support development of Infrastructure in Tanzania through the Millennium Challenge Account (MCA) fund.

 

The MCA fund was established by the Government of the United States of America in 2003 as an additional development assistance window to support developing countries that demonstrate a genuine commitment to implement reforms in three main areas namely:-
(i) Ruling justly
(ii) Investing in people and
(iii) Promoting economic freedom

The Fund is Administered by the Millennium Challenge Corporation (MCC) which is a new Institution established by the Government of the United States of America. The central theme of this assistance window is reduction of poverty through sustainable economic growth. As such, the MCA support is directed towards assisting partner countries to develop and implement country led programs aimed at accelerating economic growth and reducing poverty.