Reuters reports that the United States has approved a $698 million five-year grant to boost Tanzania's road networks, power and water supply, through its Millennium Challenge Corporation (MCC).The world community has long recognised that Tanzania's unstable power supplies and poor roads are major impediments to economic development.
Tanzania's electricity supply was put to the test last year after drought in late 2005 led to a drop in hydropower generation and culminated in extensive power rationing. Most businesses and organisations like the School of St Jude were forced to resort to costly diesel generators.
MCC said in a statement that Tanzania had developed a program to address infrastructure problems. They said,
Chosen by Tanzanians, the investments to improve the transport, energy, and water sectors will provide a catalyst to reduce poverty and spur economic growth.
Tanzania is among Africa's largest recipients of donor aid, with 42 percent of its 2007-08 budget funded by donors. The Millennium Challenge says it gives grants to countries that have shown a commitment to reforms.
If the Tanzanian government stays on track, it will continue to attract funding that will allow it to improve the basic infrastructure which is necessary to support the current 7.0% growth rate that will lift it out of dire poverty.