Finland continues development aid to Tanzania

No decision has been made by the Government of Finland to cut aid to Tanzania.

In 2007, Finland disbursed 8,6 million euros (15,7 billion Tanzanian shillings) to Tanzania as General Budget Support. The Government of Tanzania had been informed of the availability of an additional amount of 2 million euros (3,6 billion Tanzanian shillings) for General Budget Support, but that a decision of the release of that amount was to be made after the completion of the Special Audit of the EPA-account of the Bank of Tanzania. The said audit was not finalised within 2007 and therefore the additional amount of 2 million euros was not disbursed.

Finland has not stopped providing aid to Tanzania, as has mistakenly been reported in the press. Instead, Finland supported various programmes Tanzania with a total of over 22 million euros (36,5 billion Tanzanian shillings) in 2007.

At present the group of Development Partners providing General Budget Support is in dialogue with the Government of Tanzania concerning the follow up to the EPA audit. Based on this dialogue, the Government of Finland will decide whether the misappropriation of funds at the central bank will have an effect on the Finnish government's planned support in the coming financial year of 2008/2009. Decisions are expected within a few weeks.

General Budget Support is an aid modality where unearmarked funding is made available to the Government of Tanzania, to support implementation of the MKUKUTA. That funding is not used by the Bank of Tanzania, nor does it go to the EPA account, as was mistakenly reported by the Guardian. However, large scale misuse of funds at a country's Central Bank does raise concern in relation to the country's commitment to good governance and fight against corruption. These form a central part of the underlying principles for cooperation, and are therefore continuously monitored.

Tanzania is Finland's longest standing partner in development cooperation since 1962. The exceptionally close and warm relationship between the two countries has resulted in Tanzania becoming one of the main recipients of Finnish aid, which in 2008 will amount to over 30 million euros (over 55 billion Tanzanian shillings). Main areas of cooperation are Forestry and Environment, Local Government, and General Budget Support.