Tanzania May Increase Borrowing to Fund Budget After Aid Cut
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Tanzania may borrow more to help finance its budget this year after foreign donors said they will withhold funding because of a corruption scandal, Finance Ministry Permanent Secretary Servacius Likwelile said.
The U.K., Japan, Germany and other development partners including the World Bank announced last week they will keep back about four-fifths of the $558 million pledged for the country’s 2014-15 budget. Foreign loans and grants account for about 15 percent of Tanzania’s budget, and the withheld funds may derail major spending plans in an election year, said Ahmed Salim, senior analyst at Teneo Intelligence in Dubai.