Zitto na Demokrasia

Zitto na Demokrasia

Posts Tagged ‘The Citizen

Corruption stinks, We must end it now

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Corruption stinks, We must end it now

 Also reported by The Citizen Newspaper

Zitto Kabwe talking at the CEOs Round Table Dinner.

We must end it now

Remarks by Zitto Kabwe, MP at the launch of nationwide survey on people’s perceptions of corruption in Tanzania by Sauti za Wananchi, TWAWEZA on the 5th August, 2014 Dar es Salaam.

In 1999 when I was a first year student at the university and a student activist, the student body invited Judge Joseph Warioba to speak about corruption. At the Council Chamber he narrated a story about a woman whose child was sick at Mbeya Referral hospital and died because she did not have tshs 500 bribe to give to a nurse in order for the nurse to admit a drip on the child. I always remember this story and results of this survey confirm it. This survey shows that 7 out of 10 individuals consider a patient giving money or other materials to a public health facility doctor for the help they gave to them as corruption. Our people are confronted with this reality in their daily lives. We must fight everyday corruption as much as grand corruption. It is the poorest that pays the highest price of corruption. As endemic as corruption in Tanzania is, we need new approach to combat it, Thomas Sankara once said “You cannot carry out fundamental change without a certain amount of madness”.

Everyday corruption isn’t reported in our media outlets as much as mega scams, but it is real and so pervasive in our society. Daily life in Tanzania is governed by the ‘petty’ corruption of public officials in services such as health, education, agriculture and judicial system. It takes various forms including commission for illicit service, string-pulling, favours, nepotism, rent seeking and misappropriation.

The survey once again confirms the pervasive nature of corruption in Tanzania and the hopelessness the population has on cutting down corruption. It is argued that corruption in Africa generally and in Tanzania in particular is qualitatively different from corruption in other parts of the world in its pervasiveness, its legitimations and its significant impact on the nature of the state.[1] Formal definitions of corruption range from decay of society to single act of bribery. It involves the acquisition of money, assets or power in a way which escapes public view.[2]

The survey we are presented with today shows all signs of a rotten society with sustained bad habit of putting things under the carpets. 8 out of 10 people believe corruption has increased over the last decade and majority believe that we can not end corruption. What is shocking is the fact that 7 out of 10 people believe that even if we change the governing party corruption wont be fought. With the revelations of the audited report of the accounts of political parties coming soon, the people are stating the obvious. There is a moral decay. It stinks.

Public Accounts Committee’s (PAC) duty is to hold public officials accountable. Through reports of the Comptroller and Auditor General, PAC and previously POAC has produced reports and reports about mismanagement of public funds. We were very successful in 2012 whereby through a threat to impeach the Prime minister, the President sacked 6 senior ministers and 2 deputies. 1 prosecution has been done (TBS) but the hunter became hunted. POAC was disbanded, annual reports by committees pushed to November sessions of parliament (so during election year in 2015 the PAC report won’t be submitted in April!) and Public Audit Act of 2008 amended to reduce the powers of oversight committees vis a vis auditor general reports. Obviously these are steps backward. It is comparable to the famous Tehelka scandal in India where journalists showed a secret video footage of senior politicians accepting bribes. Journalists became victims instead of the corrupt.[3] But these negative actions against anti corruption campaigners shall not deter us from fighting graft in Tanzania.

I am not shocked at all with the revelations that many Tanzanians know little about scams like IPTL (8 out of 10 Tanzanians had not heard of the scandal). I knew about withdrawal of Tegeta escrow money for the first time through The Citizen newspaper and immediately I acted upon and summoned central bank governor before PAC (https://zittokabwe.wordpress.com/2014/03/04/mapya-iptl-270million-zimetokaje-bot/). We issued statements on every single step we were taking including a directive to CAG and PCCB to carry a special audit. PAC directed special audit on Tegeta Escrow Account on the 20th March, 2014. Media houses with exception of Mwananchi, The Citizen and Mtanzania were not covering the scam at all regardless of number of statements we issued. May be they did not understand it. The day ndugu David Kafulila spoke about it in parliament, handful of papers reported and majority ignored the story but carried a clarification about it. (https://www.facebook.com/zittokabwe/posts/746280225392677). I posted on my Facebook wall ‘wahariri na miwani za mbao’. Now coverage about the scam has increased with the newest revelations from RaiaMwema weekly and daily TanzaniaDaima that the scam involve a tax fraud and a fraudulent transfer of ownership involving tax havens. Therefore, there is a significant need for media coverage in order for the public to hear about these scams. In addition, it is about how the scam is communicated for the people to understand.- therefore, I believe there is a need for adequate and rational media coverage of these scams so that people can be informed about them.

In Tanzania, we have metamorphosed into a situation whereby somebody is corrupt if he or she is your political enemy. And sometimes politics drive media coverage in order to confuse the public. Today IPTL scam is one of the most misunderstood because politicians, bureaucrats and some media have collaborated for it to be so. However when PAC submits its report to the house based on the findings from special audit, the country will be stunned to see how public officials participated in sanctioning a fraudulent transaction in the name of national interest. Will PCCB go ahead with prosecutions? Yes and No.

I have full trust in the ability and capacity of PCCB. But the system is set in such a way that the latter has no powers to bite. A number of cases are with Director of Public Prosecutions (DPP). As a nation we must decide now to grant PCCB the power to prosecute. I strongly advocate the establishment of Serious Fraud Office within PCCB that will have legislative powers to investigate and prosecute all major scams done by public officials. Granting PCCB powers to prosecute may be included in the draft constitution through establishment of the Public Integrity Office.

Civil Society Organisations may as well engage in addressing everyday corruption through surveys and providing an opportunity for the people to report incidences of corruption. What about ranking regions based on corruption persecution index? Or even district authorities?

PAC is going to introduce a bill in parliament to amend proceeds of crime act so that an individual with assets not commensurate with his or her income levels has a burden of proof on the legality of the assets. Councils’ officials, central government bureaucrats and politicians with wealth not in line with their incomes must be subjected to prove origin of their wealth in court. This will help the war against corruption.

I strongly propose that pressure to enact a freedom of information act be increased. This was promised by President Kikwete under OGP and the deadline set has already passed. Powered with information, the citizens can be mobilized to end public corruption.

We have to ACT now.

[1] From Everyday Corruption and the State by Blundo G, et al.

[2] Global Corruption by Cockcroft L.

[3] Curbing Corruption in Asian Countries: An Impossible Dream? By Quah J.S

Written by zittokabwe

August 6, 2014 at 12:29 PM

Mapya IPTL: $270Million zimetokaje BoT ?

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Mapya IPTL: $270m zimetokaje BoT ?

THE CITIZEN (Courtesy MillardAyo Blog)

(Courtesy MillardAyo Blog)

THE CITIZEN (Courtesy MIllardAyo Blog)

(Courtesy MIllardAyo Blog)

Nimesoma habari kuu ya gazeti la The Citizen la tarehe 3 Machi 2014 kuhusu mauzo ya kampuni ya IPTL kwa kampuni ya Pan Africa Power Limited (http://www.thecitizen.co.tz/News/-270m-deal–Story-of-IPTL–PAP-and-High-Court/-/1840392/2228606/-/1bddmgz/-/index.html).

THE CITIZEN 4th March 2014 How $270-million IPTL deal was planned and executed

Nimeshtushwa sana na matumizi ya fedha za akiba maalumu (escrow account)  iliyokuwa benki kuu (BoT). Nikiwa mwenyekiti wa kamati ya PAC nina haya ya kusema; Mwaka 2006 Rais Jakaya Kikwete aliagiza kwamba, ili kumaliza kabisa suala la mkataba wa kuuziana Umeme wa IPTL, mitambo ya kampuni hiyo ichukuliwe na Serikali. Mwaka 2006, 2007 na 2008 Kamati ya BUNGE ya Nishati na madini imekuwa ikitoa maagizo hayo hayo kuhusu suala la IPTL. Mwaka 2009, Aprili 30 Kamati ya Bunge ya POAC ilipeleka mapendekezo bungeni kwamba IPTL ichukuliwe na serikali na fedha zilizopo katika escrow account zitumike pia kubadili mtambo ule kutoka mafuta mazito kwenda kutumia Gesi Asilia. Pendekezo hilo lilipitishwa na Bunge na POAC ikatoa maelekezo maalumu kwa Gavana wa Benki Kuu kuwa fedha zilizopo escrow account zisitumike kwa namna yeyote ile bila mitambo ya IPTL kuwa ya umma na kubadilishwa ili itumie Gesi Asilia.

Chanzo cha escrow account?

Baada ya mkataba wa IPTL kuingiwa, iligundulika kuwa kuna udanganyifu mkubwa ulifanyika katika kiwango cha mtaji wa kampuni hiyo na hivyo kufanya malipo wanayolipa tanesco kwa IPTL kuwa makubwa mno. Wakati katika kukokotoa gharama za uwekezaji (capacity charges) mtaji uliowekezwa katika IPTL ulisemwa ni dola milioni 36, ukweli ni kwamba IPTL waliweka dola 50 tu. Hivyo capacity charge ya dola milioni 3 kwa mwezi haikupaswa kulipwa yote kwani kampuni iliendeshwa kwa mkopo kuliko mtaji wa wawekezaji ( debt financed and not equity financed). Hivyo, mahakama ya kimataifa ya ICSID ikaamua kuwa, fedha zote za capacity charges ziwekwe Benki Kuu mpaka gharama halisi ziamuliwe na mahakama ndio wahusika wagawane (tanesco na IPTL). Akiba hiyo, nimeambiwa, ilifika dola 250m kabla ya kuchukuliwa na kugawanywa kwa wanahisa na wanunuzi wa IPTL. Hivyo kabla ya mgawo huu ilipaswa pesa ambazo tanesco walikuwa wanalipa kama ziada ya capacity charges kwa IPTL zirejeshwe kwanza na zinazobakia ndio zilipwe kwa wadai (creditors) na wanahisa. Kwa hali ilivyo sasa mnunuzi wa IPTL kapewa mitambo na fedha za kuinunua, ikiwemo fedha za tanesco ambazo zilipaswa kurejeshwa (Richmond cha mtoto kwa kweli).

Maswali ya kujibiwa ni haya;

Je, ziada ya fedha za malipo ya capacity charges zimerudi tanesco?

Je, mwekezaji Mpya kapewa mkataba Mpya wa kuuza Umeme (PPA) kwa utaratibu gani wa zabuni?

Je, agizo la Rais na BUNGE kwamba Mitambo iwe ya umma limetupiliwa mbali kwa vigezo gani?

Wizara ya Nishati na Madini na Benki Kuu wametoa taarifa rasmi kwa umma kuhusu masuala haya? Wizara itoe taarifa, CAG akague

Kwa namna yeyote ile CAG anapaswa kukagua mchakato huu na kuweka majibu kwa umma kupitia kamati ya PAC. Hii ndio njia bora zaidi ya kuondoa wingu katika suala la IPTL ambalo toka limeanza miaka ya tisini limegubikwa na mazongezonge ya rushwa na uvundo wa kifisadi. Uwazi utatoa ukweli na kuwezesha uwajibikaji wa fedha za umma. Wakati mchakato wa ukaguzi unafanyika ni vema Wizara ya Nishati na madini itoe tamko rasmi.


Kwa mujibu wa mkataba kati ya TANESCO na IPTL capacity charge inapaswa kukokotolewa kwa kuzingatia mtaji wa asilimia 30 na mkopo wa asilimia 22.31. Mtaji wa IPTL ulikuwa $50 tu, tofauti na $36 milioni zilizotajwa kwenye mkataba na kuamuliwa na mahakama. Badala ya TANESCO kulipa ‘capacity charge’ ya dola 50,000 kila siku Umeme uzalishwe au la, udanganyifu wa mtaji ulipelekea TANESCO kuwa inalipa dola 100,000 kila siku tangu mwaka 2002. Kuanzia mwaka 2007 fedha hizo zilianza kuwekwa kwenye akaunti maalum (escrow account) BoT.

Written by zittokabwe

March 4, 2014 at 3:51 PM

#TZPublicDebt: Back to #HIPC? The time to act is now.

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The debate about Tanzania’s national debt appears and disappears on the public discourse, however recently national debt became the focus of national discussion due to statements from the Controller Auditor General (CAG) and Minister of Finance. Media has also shoved this issue into the spotlight; The Citizen on Sunday of 26th January, 2014 calls it ‘a new debt dilemma’ with quotes from various opinion makers. Some of the opinion coming through this article appears or try to dispel the anxiety surrounding national debt with dismissive words and even wrong data.

Without mincing words, the issue is that Tanzania is about to face a debt crisis. And as an economist, I would like to add my voice to the national debt discussion with brief clarifications.

According to Bank of Tanzania’s monthly economic review for December 2013, national external debt was USD 13 billion and domestic debt stood at TZS 6 trillion. This makes a total public debt at TZS 27 trillion as of December 2013. Is this sustainable?

Debt to Gross Domestic Product (GDP) ratio is one of the indicators used to measure sustainability. It is a gauge of what is happening with the government’s finances since GDP is a measure of the government tax base. A rising debt-GDP ratio means that the government’s indebtedness is increasing relative to its ability to raise tax revenue.

The government is always arguing that national debt is sustainable because debt-GDP ratio is around 38%. This figure was quoted by Prof. Richard Mshomba from the United States in The Citizen article mentioned above. However this ratio is not the whole truth as it is an external debt-GDP ratio. The government uses this figure as a spin and it seems to stick as a fact. It is a wrong figure as the right indicator is total debt-GDP ratio. Public debt is paid mainly through revenues from taxes: this is true for both domestic and external debt. Ignoring domestic debt in measures for debt sustainability is self-pleasing.

Actually, the government has borrowed domestically above ceiling to the tune of 1.2% of GDP and this has reduced the capacity of private sector to borrow from financial institutions and hence decrease production in industries and increase unemployment.

Tanzanian GDP stands at TZS 52 trillion at current prices as of November 2013, thus Debt-GDP ratio is already above 50% and growing. Does it matter? To answer this one has to look into our budget and we will find out that the largest budget item is that for servicing national debt. In 2013/14 the government will spend TZS 2.3 trillion on national debt account alone. The debt crisis happens when the amount of money used to service debt is much higher than budget for social services like health, water services and education.

National debt now is no longer a matter of intellectual debate, because we stand on the precipice and could possibly face a debt crisis. Without urgent intervention, Tanzania will soon be back to highly indebted poor countries (HIPC) years.

Let’s stop talking about national debt and let us as a nation TACKLE it! For that we need all hands on the deck, from all quarters.

The time to act is now.

Written by zittokabwe

January 27, 2014 at 3:12 PM