Finance and Economic Affairs minister Mustafa Mkulo is looking forward to a smooth upstart of the 2009/2010 Government budget having already secured Sh420 billion from major donor countries by yesterday.

The released funds account for over 40 per cent of the Sh1.1 trillion that the Government expects to receive in general budget support from its development partners next year.

The donor countries would fund most of the development budget in the Government's Sh9.5 trillion expenditure plan, according to figures from the ministry.

During the last financial year, the donors were six months late in committing funds following corruption concerns in the Government.

During the time they were mainly pushing for the conviction of suspects in the Sh133 billion Bank of Tanzania (BoT) External Payment Arrears (EPA) scandal.

Several suspects have since been taken to court over the scandal, with the Government recovering about Sh70 billion of the funds from suspects. They had established bogus companies that illegally obtained the money from BoT.

Yesterday, Mr Mkulo was optimistic that the early release of the donor funds would help strengthen anti-poverty and economic growth projects.

He was speaking at his Treasury offices during the signing of an agreement with the head of UK's Department for International Development (DFID ), Mr Darren Welch, for disbursement of Sh230 billion. Mr Welch said the money has been paid in a single sum at the beginning of the Government financial year.

The commitment by 14 donor countries is despite the global financial crisis which has badly affected the economies of developed countries. Britain gave the largest amount in budget support.

Said Mr Mkulo: "This timely disbursement is a reflection of their confidence in the government commitment to improving the wellbeing of all Tanzanians through equitable development.

"We expect more donor countries to fulfill their promises so that we can implement our projects for poverty alleviation."

Mr Mkulo named donor countries which have so far fulfilled their promises of disbursing funds as: Finland Sh28.2 billion ($21 million), Norway Sh46.7 billion ($34.5 million), Ireland Sh23.8 billion ($17.5 million), Denmark Sh24.1 billion ($17.7 million) and Sweden Sh71.3 Billion ($52.6 million).

Mr Mkulo said the World Bank and the African Development Bank (ADB) were about to fulfill their commitments for the 2009/2010 budget.

He expressed optimism that the donors would fund the second phase of the poverty and wealth creation programme (known in Kiswahili as Mkukuta) in 2010.

"We expect in November to sit with development partners and discuss the achievements, failures and ways to improve Mkukuta II so that it can register better achievements past Mkukuta I," said Mr Mkulo.

Responding, Mr Welch said: "This contribution indicates UK's firm commitment to Tanzania's development efforts and continues to make the UK the largest bilateral donor providing budget support to Tanzania."

He said the support is intended to strengthen maternal health, availability of safe water and increase enrolment of school children.

Mr Welch said UK has announced a white paper on international development meant to reaffirm its commitment to international development during the global financial crisis.

"The white paper sets out a number of priority areas that the UK will address in its development assistance. These priorities are very much in line with the support we are already providing to Tanzania," said Mr Welch.

Meanwhile, the EU Commission has approved Euro 385 million (Sh712 billion) in aid to Tanzania. A news dispatch from Brussels indicated that its executive approved the funding yesterday, the largest annual assistance package for an African country.

"This substantial financial commitment demonstrates our confidence in the Tanzanian Government to aggressively tackle the economic challenges ahead ...," EU Humanitarian Aid Commissioner Karel De Gucht said in the statement.

The European Commission said it would inject Euros 305 million (Sh564 billion) into Tanzania's national budget as part of its multi-annual aid programme known as Millennium Development Goal. It earmarks some Euros 70 million (Sh129.5 billion) for road construction.

About Euros 8 million (Sh14.8 billion) is to be spent in renewable energy in the country, where only ten per cent of the population has access to electricity.