At least five senior government officials have been charged in court – during the past two months – over allegations of receiving money purported to be part of what was dubiously withdrawn from an Escrow Account at the Bank of Tanzania (BoT).
They include a legal officer with Tanzania Electric Supply Company Limited Steven Roman Urassa, the Ministry of Land and Housing Settlements Development Legal Officer Rugonzibwa Mujunangoma, the Rural Energy Authority (REA) Director of Engineering Theophilo Bwakea, the BoT Director of Finance Julius Rutta Angello, and Tanzania Revenue Authority (TRA) Tax Exemption Manager Kyabukoba Leonard Mutabingwa.
The scam also led to the resignation of former Energy and Minerals minister Prof Sospeter Muhongo and former Attorney General Fredrick Werema as well as the sacking of former Lands, Housing and Human Settlements Development minister, Prof Anna Tibaijuka. Similarly, the Energy and Minerals Permanent Secretary Eliakim Maswi was suspended pending investigations on his role in the matter. A number of senior public servants have also been grilled by the Ethics Commission for purportedly receiving part of the money.
And, in a statement released by the IMF team – which visited Tanzania from March 5 – 19, 2015 to conduct a second review under the fund’s Policy Support Instrument (PSI) program- the IMF said it was impressed with the steps.
“The mission welcomes the steps taken to address the governance concerns raised by the IPTL case. Continued progress will be critical both to sustain the resumption of donor financing and to limit any repercussions on the business environment,” the statement reads.
The statement seems to concur with a recent announcement by Tanzania’s 12 General Budget Support partners who said they would start releasing part of their pledged budget funds after seeing progress on the energy sector scandal.
According to the statement, the IMF team was led by Hervé Joly and it met with Finance Minister Saada Mkuya Salum and BoT governor Prof Benno Ndulu.
In a nutshell, the team noted that Tanzania’s macroeconomic developments have continued to be favourable – with growth being projected to be slightly over 7 per cent in 2014 while inflation has dropped below the authorities’ target of 5 per cent.
According to the statement, the recent international oil price decline will provide a boost to the economy in 2015 and help contain inflation while the revised national accounts, which incorporate recent surveys and methodological improvements, suggest that the size of Tanzania’s economy is about 30 percent bigger than earlier thought. The depreciation of the Tanzanian Shilling against the United States Dollar is not that bad for Tanzania as it contributes to maintaining the competitiveness of Tanzania’s exports and benefits for farmers and other exporters.
The IMF however, urged Tanzania to avoid further accumulation of expenditure arrears, in the wake of substantial dwindling tax and nontax revenue collections which ultimately have an impact on execution of the 2014/2015 budget. ““Budget implementation for 2014/15 remains challenging….It will be important to strengthen the expenditure commitment controls….The accumulation of payment arrears in the public sector needs to be tackled forcefully. This problem has become pervasive with large and growing government arrears to domestic suppliers and pension funds, and persistent arrears of Tanesco to its suppliers,” the statement reads.
It is important that the government now implements measures to settle existing arrears and prevent the recurrence of new ones by tackling their root causes, it stated.
The Citizen
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