Tanzania's government says it's facing a difficult financial time after donors pulled funding over its treatment of the gay community, but it says it won't back down.

Finance Minister Philip Mpango told officials on Friday that many donors have encouraged Tanzania to tolerate homosexuality as a condition for aid, but he said "there is no way" the country can comply. He called the conditions "intolerable."

He said the loss of aid poses a serious challenge as the East African country struggles to fund several multi-billion-dollar projects.

Some donors pulled aid or threatened to do so after the commissioner for the commercial capital, Dar es Salaam, urged Tanzanians to "report" suspected homosexuals.

Tanzania's federal government later disavowed the statements, but fears of a crackdown remain as homosexuality is illegal.

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