WHO OWNS BoT?

Govt: BoT wholly owned by Union

BY DICKSON NG`HILY

6th November 2012

Janeth Mbene

Finance and Economic Affairs deputy minister Janeth Mbene has refuted claims that the government of Zanzibar contributed to the start-up capital of the Bank of Tanzania (BoT).

Mbene explained in the National Assembly yesterday that BoT was established by the Bank of Tanzania Act of 1965 and section 12 (2) reveals that the bank’s capital was provided by the United Republic of Tanzania, who is the bank’s sole owner.

“The start-up capital for the establishment of BoT was 20m/- issued by the Treasury….The Bank of Tanzania Act of 2006 section 17 (2) has inherited that section and it still reads the same. Therefore, it is not true that Zanzibar contributed 11 per cent of BoT's starting capital,” she maintained.

Nevertheless, Mbene clarified: “As part of the United Republic of Tanzania, Zanzibar has got shares…although I am not sure how many, maybe the 11 per cent the MP is referring to might be the ones Zanzibar had in the East Africa Currency Board.”

According to Mbene, when the board was dissolved, Zanzibar got hold of her shares worth 11.2 per cent.

“It is not correct to say that the money received (11.2 per cent) was injected as starting capital since the board was dissolved in 1972, while BoT was established in 1965,” Mbene insisted.

The deputy minister furthermore told the House that in making sure Zanzibar receives its dividend from BoT, in 1994 the International Monetary Fund (IMF) made a technical assessment which concluded that Zanzibar was entitled to 4.5 per cent of BoT's dividends.

“The criteria used included population, volume of exports and imports, savings, government earnings as well as money circulating outside the banking system in Zanzibar," the minister said, adding:

"However, there are some grievances that Zanzibar is being shortchanged. The Joint Commission is working on the matter.”

Earlier in his question, Khalifa Suleiman Khalifa, MP for Gando (CUF), wanted to know which criteria were used since 1994 to give Zanzibar 4.5 per cent of BoT’s dividends, saying that Zanzibar contributed 11 per cent of the bank's starting capital.

“When will this mess be cleared, and when settled, when is Zanzibar going to have its arrears paid for all the years that it has not been receiving its fare share?”

SOURCE: THE GUARDIAN