Tanzanian government shocked by the Millennium Challenge Corporation (MCC) announcement on termination of its relations due to the political situation in Zanzibar.
The implementation of the new Cybercrimes Law is the other reason for the refusal to contribute on the budget.
The decision leads to the government getting the critical funding for the lined up projects and carry the burden alone or shelve some of the projects that are key to the development.
In December 2015, the MCC Board of Directors deferred a vote on the reselection of Tanzania for compact eligibility worth $472 million, citing the nullification of election results in Zanzibar and the need for a prompt, fair and peaceful conclusion of the electoral process.
The Board also sought assurances from the government that the disputed Cybercrimes Act would not be enforced to limit freedom of expression and association, in the light of arrests made in the course of the October 2015 General Election.
Tanzania was among a few countries selected for the first compact funding and received about $700 million (Sh1.5 trillion) which financed projects in water, roads and electric power for seven years up to 2015.
The first compact programme led to the construction of over 3,000km of power lines, 450km of trunk roads, two water treatment plants and Mafia Airport runway.
