MCC Board of Directors Approves $698 Million Poverty Reduction Grant for Tanzania

Fact Sheet

Washington, D.C.—The Millennium Challenge Corporation’s Board of Directors approved a five-year, $698 million Millennium Challenge Compact with the United Republic of Tanzania that seeks to reduce poverty, stimulate economic growth, and increase household incomes through targeted infrastructure investments in transport, energy, and water.

“This agreement is a testament to Tanzanians’ commitment to building a better life for themselves and their children,” said MCC CEO Ambassador John Danilovich. “MCC congratulates the people of Tanzania for developing a comprehensive program designed to address Tanzania’s key constraints to economic growth—an inadequate transportation network, insufficient and unreliable supply of energy, and a shortage of clean and safe water. Chosen by Tanzanians, the investments to improve the transport, energy, and water sectors will provide a catalyst to reduce poverty and spur economic growth.”

MCC assistance used to rehabilitate Tanzanian roads will help connect road users and communities with markets, schools, health clinics, and promote the expansion of economic opportunities by reducing transport costs. Investments in reliable energy are vital for private sector activities and to provide Tanzanians with social services such as education and healthcare. The Compact also funds water infrastructure improvements that will increase access to potable water and will mitigate the incidence of water-related disease, burdensome healthcare costs, and decreased workforce productivity.

Ambassador Danilovich added, “Through this Millennium Challenge grant, the American people proudly support Tanzania’s efforts to reduce poverty and improve the lives of its citizens. I commend President Kikwete for his leadership and support throughout the development of this Compact.”

It is estimated that the program will benefit approximately 4.8 million Tanzanians either directly or indirectly upon project completion.

Compact signature is contingent on fiscal year 2008 funds.

Since its inception in 2004, MCC has approved Compacts totaling over $5.5 billion with 16 partner countries: Madagascar, Cape Verde, Honduras, Nicaragua, Georgia, Armenia, Vanuatu, Benin, Ghana, Mali, El Salvador, Mozambique, Lesotho, Morocco, Mongolia, and Tanzania.

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Millennium Challenge Corporation (MCC), a United States government corporation designed to work with some of the poorest countries in the world, is based on the principle that aid is most effective when it reinforces good governance, economic freedom, and investments in people that promote economic growth and elimination of extreme poverty.