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Tuesday, 29 January, 2002, 16:58 GMT
Tanzania responds to air traffic furore
Dar es Salaam airport
Dar es Salaam airport is to benefit from the new air traffic control system
The Tanzanian Government has defended its decision to buy a new air traffic control system from the United Kingdom. Tanzanian Foreign Minister Jakaya Kikwete tells the BBC's File on Four why he is puzzled by the furore.

The controversy over the contract hit the headlines towards the end of December.

There were even reports of splits in the UK cabinet, with ministers such as International Development Minister Clare Short angry at the government's decision to grant BAE Systems an export licence for the $39.5m (£28m) system. 

Critics claim it is too expensive for Tanzania's needs and is intended for military as much as civilian use.  

But, speaking on the BBC's File on 4 programme, Mr Kikwete maintains there was no need for the fuss.


We are not a department of the World Bank -  we are a country and it's a bit insulting to suggest that we need to wait for the World Bank to prescribe what's best for us

Tanzanian Foreign Minister Jakaya Kikwete
"Our engineers prescribed the system which we required", he says.

"We put the contract out to tender, four companies competed and we got BAE Systems delivering to our specification. This is the system we wanted."

Which is fine except for the background against which the contract became public.

Debt relief

Tanzania is one of the poorest countries in Africa, and one of only four countries in the world to have had a portion of its international debt written off - a total of $3bn (£2.1bn) which will be discounted over the next 20 years.

The relief will make a healthy dent in Tanzania's total international borrowings of  more than $7bn.

Babati district in Tanzania
Tanzania: one of the poorest countries in Africa
It was confirmed only after the Government in Dar es Salaam signed an agreement with the World Bank to implement the conditions of a so-called  Poverty Reduction Strategy Paper (PRSP).

Under the PRSP specific targets will be met for improvements across a wide range of social issues.

These range from infant mortality and increased access to education and health, to the provision of more roads and clean water supplies. 

'Insulting'

Critics of the air-traffic control deal say the $39.5m (£28m), borrowed at a reported interest rate of 4.9% from the UK's Barclays Bank, could have been better used to fund clinics or schools.

Even the World Bank has quietly demurred and is still reviewing the contract.

Foreign Minister Kikwete is adamant that it is not anyone else's business how his government elects to prioritise spending.

"We are not a department of the World Bank -  we are a country and it's a bit insulting to suggest that we need to wait for the World Bank to prescribe what's best for us," Mr Kikwete said.

"The responsibility for Tanzania is in the hands of Tanzanians."

Benefits?

But the debate does not end with air traffic control and it raises fundamental questions about the overall benefits of the debt relief package.

Chombu primary school in Tanzania
Primary school education improved as part of debt package
One of the conditions to which the Tanzanian Government had to agree was greater access to education - all primary aged children will be in schools with class sizes under 50 in the next five years.

As part of that agreement, basic primary school fees have been abolished.

But the cost of these reforms will be $600m - and nearly half of that will have to be financed by further loans from the World Bank.

The government has also signed up to borrowing another $65 million from the Bank to fund agricultural improvement through a project which will provide subsidised seeds and fertiliser.

Critics question the wisdom of this. They  say the project is modelled on a previous, smaller-scale scheme which collapsed and warn that it will do little to build a viable and sustainable agricultural sector.

In both these cases the Tanzanian Government hopes that its new borrowing will be paid for out of increases in gross domestic profit. 

The World Bank and IMF predict that the necessary 6% growth in the country's economy is achievable.

But, for Kevin Watkins, Policy Director at Oxfam, the risk is that the benefits of debt relief will be wiped out by the government's need for further loans to fund reform.

"I think these are very fundamental questions. These are scarce financial resources and it's imperative that recipient governments are seen to direct those resources to areas where they will have a real impact on human development," Mr Watkins said.

Back in the foreign ministry, Mr Kikwete acknowledges a paradox in Tanzania's situation.

His government now needs to meet targets on social reform in order to qualify for help with its previous debt.

The spending on reform is likely to drive Tanzania further into debt.

But Mr kikwete says his country has little choice.

"What else do you do? If there were better conditions we would take them.

"But if these are the conditions, then this is the world we are in and this is the reality we have to understand. We are biting the bullet."

File on Four 4 is broadcast on Tuesday 29th January on BBC Radio 4 at 2000GMT and repeated on Sunday at 1700GMT.

See also:

24 Dec 01 | UK Politics
Short attacks Tanzania decision
21 Dec 01 | UK Politics
Tanzania 'needs costly radar system'
21 Dec 01 | Talking Point
Tanzania: Is the UK radar deal justified?
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