International
donors have suspended nearly $500m (£311m) in budget support to
Tanzania in response to claims that senior government officials siphoned
off funds from the country’s central bank under the guise of energy
contracts.
The
chair of Tanzania’s public accounts committee, Zitto Kabwe, said
several high-ranking officials colluded with corrupt businessmen to
transfer $122m from a holding account in the central bank to private
accounts overseas.
A
group of 12 funders, including the UK’s Department for International
Development (DfID), have given Tanzania $69m for general budget support
so far this year and the group has committed to contributing $559m
towards the current budget. The
donors announced, however, that they would suspend further general
budget support payments until more information about the scandal has
been released, freezing $490m in financing.
“Disbursements
have not been made because we are waiting for the controller auditor
general report and the government action following that,” said Sinikka
Antila, Finland’s ambassador to Tanzania and chair of the donors’
general budget support committee.
“If in the report there is misappropriation or some wrongdoing, then we want to see prudent action by the government.”
Two
businessmen have been accused by Kabwe of selling mispriced electricity
to the government of Tanzania over the past two decades. Kabwe’s
committee is investigating the scandal.
Tanzania
has struggled to generate electricity and its economy has been plagued
by power shortages. Lawmakers and donors bemoan the effect of corruption
on the country’s development.
“We
have been having huge problems with electricity in Tanzania for the
last 20 years,” said Kabwe, who is a member of parliament for Chama cha
Demokrasia na Maendeleo, Tanzania’s main opposition party. “There is no
story of power in Tanzania, of the energy sector in Tanzania, without
corruption.”
The
World Bank and the International Monetary Fund have long been involved
in infrastructure projects in the country, with the World Bank
overseeing more than $230m of financing to the country. But their
willingness to work with government officials has meant that they are
“becoming allies of the corrupt regime”, Kabwe said.
Donors
to Tanzania’s general budget support programme include the African
Development Bank (AfDB), Canada, Denmark, the European commission,
Finland, Germany, Ireland, Japan, Norway, Sweden, the UK and the World
Bank.
General
budget support is designed to fund programmes “in accordance with the
government’s development priorities”, most of which focus on poverty
alleviation, according to Antila.
A
DfID spokesman said: “The UK takes a zero tolerance approach to fraud
and corruption. In line with other donors, we will not disburse any
further budget support to Tanzania until we have considered the findings
of the inquiries currently under way.”
Politicians are worried that the scandal could taint Tanzania’s political and business climate as it prepares for large-scale gas production in the coming years.
“It’s
about the credibility of the country before the eyes of the
international community and international investors, but also the
impunity that public officials can be involved in corrupt deals and the
prime minister will stand up and defend them,” Kabwe said.
“This
is the right time to fight and set very strong deterrent measures
against corruption, because if we don’t do this now, the moment we start
to receive a lot of gas revenues … we are going to have a big problem.”
•This article was updated on 15 October 2014 to include a statement from the UK’s Department for International Development
Comments
Post a Comment