EU delays 900bn/- aid package to Tanzania SEBASTIAN MRINDOKO Dar es Salaam THE European Union has not released the 555 million euros (approx. 980bn/-) budgetary support it promised Tanzania reportedly because the government has yet to meet some agreed conditions, it has been disclosed. The European Commission was last month scheduled to launch its largest ever aid package for economic growth and trade-related issues in Tanzania, as part of General Budget Support. However, the aid disbursement under the 10th European Development Fund (EDF) framework has since been delayed. Under the five-year EDF programme (2008-2013), the EU funds were expected to finance key poverty reduction sectors such as education, health and infrastructure. General Budget Support is provided by 14 donors in Tanzania, and together with the Highly Indebted Poor Countries initiative (HIPC) relief, contributes 20 per cent of public expenditure. While it is understood that other donors have already fulfilled their commitments to Tanzania in budget support, the EU appears to be somewhat dragging its feet until certain conditions are met by the government. The Permanent Secretary in the Ministry of Finance and Planning, Gray Mgonja, yesterday dismissed suggestions that the delay in the release of the EDF funds was caused by misunderstandings between the two sides on certain areas. There have been reports that the European Commission had delayed the release of the funds to Tanzania because of concerns over corruption allegations at the Bank of Tanzania and elsewhere. But Mgonja insisted that there was no apparent association between the delay in the release of the funds and the governments reported failure to meet conditions. They have not told us anything about the delays. But in my opinion, it may just be the result of bureaucracy at the head office in Brussels in releasing the funds earmarked for budget support, the Treasury PS told THISDAY when contacted in the city yesterday. This afternoon, I expect to have a meeting with the European Union representative in Tanzania. We will discuss the release of the funds, he said. He reiterated that there was no connection between the issue and the governments ongoing war against corruption, particularly the investigation into massive misuse of funds in the BoTs external payment arrears account. Budget support is money going straight to the Treasury, not earmarked for any specific expenditure but allowing the government to increase its overall spending. But like the ordinary Tanzanian taxpayer, budget support donors like to know what the government intends to do with this money towards improving the lives of its citizens, how these plans are progressing, and how the money is actually spent. Since the year 2000 when General Budget Support was first introduced, the government has scored good progress on a number of poverty reduction indicators, including: Education Primary education is now free and more children are now enrolled in school (enrolment has risen from 60% in 2000 to 97% in 2007); An extra 40,000 primary school teachers have been hired between 2003 and 2007; The proportion of students passing the Primary School Leavers' exam has risen from 22% in 2000 to 62% in 2005; More secondary schools have been built to accommodate the children who are finishing primary school (between 2006 and 2007 the number of secondary schools increased by more than 50% from 2,300 to 3,500). Health The number of children dying before the age of 12 months has gone down by almost a third in the last five years, with 68 deaths per 1,000 live births in 2004, compared to 99 deaths per 1,000 live births in 1999; Under-five mortality (deaths of children before the age of 5 years) has gone down by almost a quarter from 147 deaths per 1,000 live births in 1999 to 112 deaths per 1,000 live births in 2004. This reduction can be attributed to GoTs efforts to increase the use of vitamin A supplements, child immunisation and insecticide-treated bed nets to fight malaria; The number of under five-year-olds sleeping under an insecticide-treated bed net doubled to almost 30% between 2005 and 2006. Infrastructure More people now have access to better roads, with the percentage of trunk and regional roads in good and fair condition increasing from 51% in 2000 to 84% in 2005. But despite these achievements, significant challenges still remain. These include the need to strengthen local government financing systems and ensure that resources reach districts on time to enable them to implement their development plans. There is also a need to build capacity at district level to deliver critical services such as schools and clinics and improve monitoring systems to ensure that there is reliable data to measure progress being made in each sector and plan effectively.