Closed Compact Report: Tanzania Compact | November 2015


The United Republic of Tanzania, comprised of the mainland and Zanzibar, is located in East Africa and borders the Indian Ocean and eight nations. Tanzania plays an important role in the region as an economic trade partner, and stands out as a proponent of peace and stability. However, nearly 36 percent of the mainland population and 49 percent of the Zanzibari population live below the national poverty line. An inadequate transportation network and an insufficient and unreliable supply of energy are key constraints to economic growth and private investment in Tanzania. The water service sector faces clear challenges as well.  The Millennium Challenge Corporation and the Government of Tanzania signed a five-year, $698.1 million compact in February 2008, designed to benefit more than five million people by promoting economic growth and reducing poverty through investments in the country in three project areas:

  • the transport sector;
  • the energy sector; and
  • the water sector.

Selection of these project areas, jointly identified by Tanzania and MCC, aligned with the government’s multi-year development strategies. Thee projects were developed through collaboration with key stakeholders, including representatives from local government, members of parliament, the private sector, and nongovernmental organizations. The compact was designed to address regional imbalances in the provision of infrastructure by targeting investments for “pro-poor growth.”

More than 99 percent of the anticipated compact funds were expended by the end of the compact in September 2013 to improve market linkages and increase investment, economic output and household productivity throughout the country.  Tanzania demonstrated its commitment to the compact partnership by contributing approximately $132 million to complete projects where costs exceeded the anticipated project budgets, especially in the transport sector. Further details of the compact results and impacts will be shared in forthcoming revised cost-benefit analyses and impact and performance evaluations, expected to become available through 2018.