Tanzania and its major donors are yet to resolve their differences over budget support, a situation that could negatively affect the 2015/2016 fiscal year.

Treasury says the $300 million budget-support funding that has been committed so far for 2015/16 will be provided by two multilateral organisations.

Senior officials at the Ministry of Finance said the government has vowed not to accept the aid unless it is given unconditionally.

A senior aide to Finance Minister Saada Mkuya said most of the budget support development partners were unlikely to provide funding this financial year. He said the donors are also unlikely to clear the remaining amounts of the pledges they made for the current financial year, which ends next week.

Budget support commitment during 2014/15 was Tsh922.2 billion ($457.4 million) but disbursement has been Tsh408 billion ($202.38 million), which is only 44 per cent of the total pledges.

“The donors who have been reluctant to make budget support commitments for 2015/16 because of the unending misunderstanding on the aid modality are Canada, Denmark, Finland, Ireland, the European Commission, Japan and Sweden,” the official told The EastAfrican on condition of anonymity.

Permanent Secretary in the Ministry of Finance Servacius Likwelile said that so far only the World Bank and the African Development Bank have agreed to fund the 2015/16 budget.

The head of the budget-support development partners group, Filiberto Sebregondi, said the talks with the government were focusing on two fronts — short-term plans, which focus on budget support during 2015/16, and long-term strategies that include a reformed modality of delivering the aid.