Tanzania's Ruptured Relationship with the Millennium Challenge Corporation
May 2, 2016
The Millennium Challenge Corporation (MCC) announced in March that it had suspended its partnership with the government of Tanzania. Relations had been in freefall since last October, when elections in the semiautonomous islands of Zanzibar were annulled. The dispute puts at risk an MCC grant of $472 million intended to help Tanzania bolster its power sector.
Q1: What reasons did MCC give for suspending its partnership with Tanzania?
A1: The primary reason for the suspension appears to have been Tanzania’s decision to move ahead in March with an election rerun in Zanzibar that the MCC described as “neither inclusive nor representative.” In October 2015, the chair of the Zanzibar Electoral Commission (ZEC) unilaterally annulled the elections for president of Zanzibar, claiming massive irregularities. Because the commission could not produce any evidence of fraud, and because exit polls and an opposition-led parallel vote count indicated a victory for the Civic United Front (CUF) candidate Seif Sharif Hamad, the annulment was widely seen as a maneuver by the ruling Chama Cha Mapinduzi (CCM) party to maintain its grip on power. Following the October annulment, CUF and CCM leadership agreed to a negotiation process to resolve the impasse that was supported by the international community and, ostensibly, by newly elected Tanzanian president John Magufuli. Negotiations were abruptly halted, however, when the ZEC chair announced a rerun to be held on March 20. CUF boycotted the rerun, and following the vote, the ZEC announced a victory for CCM candidate Dr. Ali Mohamed Shein, claiming a 68 percent voter turnout and 91.4 percent vote in his favor.
The Zanzibar electoral process was a tipping point in the MCC’s deliberations, but a broader pattern of restrictions by the CCM in the run-up to the 2015 elections had also been a concern. In the suspension announcement, the MCC also cited the Tanzanian Cybercrimes Act, which prohibits Tanzanians from transmitting unsolicited messages via computer or publishing “information, data or fact” that is "false, deceptive, misleading, or inaccurate.” Concerns that the law could be used to silence political dissent were validated on election day when opposition members were arrested and charged under Section 16 of the law, which forbids the publication of “inaccurate or unverified data” on social media and even on private servers and carries a minimum penalty of six months in prison. A “Misconception of Statistics” law, passed at the same time as the cyber-crimes law, makes it illegal to publish statistics that are not generated or approved by the government. Proposed legislation restricting media freedoms and access to information were withdrawn only after a public outcry.
Relations with the international community were further strained in January of this year when Tanzania’s parliament passed a bill severely restricting the actions and movement of foreign diplomats and international workers within the country. According to the new law, diplomats must get permission from the Ministry of Foreign Affairs to travel upcountry to meet with local government authorities and party members. The opposition has characterized the law as an attempt by the CCM to consolidate power and exert further control over domestic political activity.
Q2: What’s been the fallout in Tanzania?
A2: Tanzania president John Magufuli put a positive spin on the news, calling the suspension an opportunity for Tanzania to get serious about reducing its dependence on foreign assistance. “We need to stand on our own,” Magufuli told a public rally following the MCC suspension. “If you are a farmer, you need to farm hard, if you are a fisherman, fish hard, or if you are employed anywhere, then work hard, so that Tanzania and Tanzanians can get rid of donor dependence.”
This is easier said than done. From 1990 to 2010, Tanzania was the second-largest recipient of U.S. assistance in sub-Saharan Africa, behind only Ethiopia (which has double the population), and has averaged $545 million in U.S. assistance each year since then. As recently as 2013, Tanzania was the world’s seventh-largest recipient of official development assistance. Its ambitious development plans are unlikely to be achieved if current foreign assistance levels aren’t maintained, even as the current administration argues—rather unconvincingly—that increased revenue from improved tax collection could bridge the gap.
As President Magufuli minimized the MCC decision, many voices in the Tanzanian press—and in the ruling party—publicly condemned it. Among the critiques has been whether the MCC Board of Directors had been consistent about what hurdles Tanzania needed to clear in order to receive support. Critics have claimed that the board made no mention of the cyber-crimes law prior to the suspension, although the legislation was passed eight months prior. In fact, the MCC had been privately communicating its concerns about the law to Tanzanian officials long before the suspension; private correspondence from November, later leaked to the press, shows the MCC seeking assurance from the government that the law would not be used to restrict freedom of expression. No such guarantee was given, and the MCC report to the U.S. Congress in December 2015 cites the cyber-rimes law among the reasons that Tanzania’s reselection was deferred.
Critics have also decried the decision as moralistic and hypocritical, arguing that the U.S. government provides assistance to authoritarian governments elsewhere and should not punish a multiparty democracy like Tanzania. Some have pointed to past MCC programs in Uganda and Rwanda, where political rights are far more constrained than in Tanzania. Missing from these critiques is the fact that Tanzania, which received almost $700 million during its first partnership with the MCC (its now-suspended $472 partnership would have been its second), received a compact, while Uganda and Rwanda, which received $10 million and $24 million respectively, were selected for threshold programs. The threshold category is designed for countries that are either close to meeting or have begun to meet the selection criteria but must show further improvement to qualify for a full compact. Neither Uganda nor Rwanda ultimately qualified.
Tanzania remains a partner in almost every U.S.-Africa assistance initiative. It is among the largest recipients of funding through the President’s Emergency Plan for AIDS Relief (PEPFAR); it has been a focus country of the President’s Malaria Initiative; it is the largest recipient of Feed the Future programming; and it was among the first five focus countries of Power Africa, the Obama administration’s effort to improve access to affordable, reliable electricity. These programs almost certainly will be sustained.
The MCC compact model is purposefully different. Its hallmark is selectivity, based on a compact country’s proven record of respect for political rights, sound economic management, and good-faith efforts to deliver basic services. Partner governments enter a compact with the U.S. government (and thereby the U.S. taxpayer), with the understanding that these standards of governance are critically important and will be upheld. Compact grants are large, and partner governments have considerable latitude in planning how those funds will be used and how programs will be implemented and overseen.
Q3: What happens now? Is there a possibility that Tanzania’s MCC compact will be reinstated?
A3: The ball is in Tanzania’s court. Examples from other MCC countries suggest that Tanzania will have to back down in order to get reinstated. In March 2012, Malawi’s compact was suspended due to a rapidly deteriorating human rights environment. Just three months later, the MCC Board of Directors reinstated the compact after the situation dramatically improved. This was, admittedly, an exceptional case, as the president responsible for the downward trend, Bingu wa Mutharika, died just two weeks after the announcement, and his successor, Joyce Banda, immediately undertook a series of reforms. However, this example shows that the MCC can be responsive when a government demonstrates an effort to restore democratic governance. After all, suspensions are a setback for the MCC as well; the agency has an interest in seeing its programs succeed and justifying its existence at a time when the U.S. foreign aid budget is under pressure.
For Tanzania to put itself in position for reinstatement, corrective measures on Zanzibar will have to be taken. Most feasible would be the formation of a coalition government, as happened following the contested election outcome on Zanzibar in 2010. However, the CUF leader Seif Sharif Hamad has said he will not accept any invitation to negotiate, arguing that the CCM missed its chance before the March rerun. Meanwhile, the party chairman, Twaha Taslima, has welcomed the MCC’s decision and urged other donors to follow suit.
The CUF recognizes that the primary condition for MCC reinstatement—a political resolution on Zanzibar—depends on its cooperation and eventual satisfaction, which gives the party tremendous leverage in any future negotiations. The CCM is aware of its unfavorable position and does not appear eager to compromise. For these reasons, a deal on Zanzibar appears out of reach for the time being. Without a breakthrough, the prospect of Tanzania restoring good relations with the MCC is a distant one.
Jennifer G. Cooke is director of the Africa Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Ben Hubner is a research associate with the CSIS Africa Program.
Critical Questions is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
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