Millennium Challenge Corporation Resumes Partnership with Tanzania Thanks to Democratic Governance and Economic Freedom

On 14th December 2023, The United States bilateral foreign aid agency Millennium Challenge Corporation (MCC) Board announced the selection of Tanzania to develop a new threshold program.

MCC threshold programs assist candidate countries to become compact eligible by incentivizing them to demonstrate their commitment to just and democratic governance, economic freedom, and investments in their people.

Back in 2016, the MCC announced the suspension of a second funding package worth USD 470 million to Tanzania that was meant to fund development projects in the power sector.

The primary reason for the suspension was the 2015 election process in Zanzibar which the MCC described as neither inclusive nor representative.

As a former partner in MCC compacts, Tanzania’s selection for the threshold program recognizes its continuous efforts in implementing critical reforms.

These reforms are aimed at strengthening democratic governance, protecting human rights, and fighting corruption, which are vital for sustainable development and economic growth.

The MCC threshold program is notably different from larger compacts, as it is more focused on supporting policy and institutional reforms that directly tackle economic growth constraints.

This program represents a strategic partnership, aiding Tanzania in addressing pressing development challenges while promoting regional economic integration.

MCC’s Chief Executive Officer Alice Albright emphasized the organization’s dedication to building on previous partnerships and working collaboratively with Tanzania to enhance prosperity.

The selection of Tanzania reflects MCC’s broader goal of fostering economic growth and reducing poverty through targeted investments and reform initiatives.

She added that “The Board’s selection of Tanzania advances MCC’s mission to forge strong partnerships with countries that have demonstrated a commitment to democratic governance, investing in their people, and economic freedom. We look forward to building on prior partnerships and working hand in hand with each country to advance prosperity for their people.”