EU, US aid suspension: We reap what we sow, yet it serves us a lesson

BY EDITOR

Editorial Cartoon

Tanzanians woke up to what can be described as a shocking news yesterday following reports that the US government put on hold the signing of the Millennium Challenge Corporation (MCC) compact with Dar es Salaam pending government’s response on the Tegeta escrow scandal.

 

However, those who closely followed the debate in the recent 16/17 meeting of the 11th Parliament in Dodoma, realize that the news announced by the US government echoed what Kigoma South MP David Kafulila had already given  as a hint.

 

MP Kafulila was on record telling the House that as a result of the escrow account scandal Tanzania stood a chance of losing the opportunity of benefiting from the MCC funded projects reportedly valued at between $450million and $700million.

However, such claims were vehemently denied by the Minister for Energy and Minerals Prof Sospeter Muhongo and Finance Minister Saada Mkuya, until Thursday when the reports were proven to be true.

 

It should be noted that the decision by the US government to put on hold its aid package worsens Tanzania’s 2014/15 budget implementation, considering the fact that EU also suspended aid worth $500 million due to the same issue.

 

 We, as Tanzanians, must accept that corruption is a problem that is now entrenched in the society and in the government.

Just to memorise, in 1999 the government agreed to buy a radar apparatus at £28 million but it later came to be known that more than a third of the total purchasing price was paid to a middleman of British citizenship to secure the contract. 

 

Also based on an Interpol report, one government minister had siphoned more than £1m to his bank account in Jersey, also in the UK. After international legal action, BAE was ordered by court to pay £30m to the Tanzania government.

 

In 2005 the government was involved in the fraudulent payment of about Sh133 billion ($116 million) by the central bank to 22 companies in the financial year 2005/06 involving the repayment of the country’s external debt.

 

After investigations the president sacked the Central Bank Governor and asked "kindly" those who looted the national treasury to return the money. A few months later, according to a government pronouncement, nearly half of the money (sh 60 billion) had “mysteriously” found its way back into state coffers.

 

A year later the country faced a serious crisis in electricity supply and, as an emergency measure Richmond was awarded a contract to supply generators to provide 100 megawatts at a cost of Sh172 billion. The generators failed to arrive on time and when they did they did not work as required. The list of scandals can be stretched further

 

It should be borne in mind that when development partners dish out financial aid they would like it to be judiciously spent. They want to see positive impact but in most cases that is not the case.

 

Tanzania’s donor dependency is estimated at about 30 per cent for development projects, which means that if they refuse to give out money development projects are likely to suffer much as it is the case now. 

 

Still there are serious lapses in disbursements for instance in the course of last year, where both donor disbursements and revenue collection woefully failed to meet development budget targets.

 

Kenya experienced similar problems in recent years but the consequences to the country’s economy were not severe because until 2010 its budget was dependent on donors by only five per cent.

 

We, as Tanzanians must agree that efforts must now be taken to widen and strengthen the country’s economy through effective use of resources, stamping out corruption and increasing accountability and transparency.

What happens now should serve as a lesson.

SOURCE: THE GUARDIAN