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Dar to lose Sh400bn in World Bank cash

Discussion in 'Jukwaa la Siasa' started by BAK, Sep 12, 2009.

  1. BAK

    BAK JF-Expert Member

    Sep 12, 2009
    Joined: Feb 11, 2007
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    2009-09-11 08:21:00
    Dar to lose Sh400bn in World Bank cashBy Samuel Kamndaya and Mkinga Mkinga

    Tanzania stands to lose $312 million (about Sh405.6 billion) in soft loans from the World Bank in the next three years, having performed poorly on the key criteria for such lending, The Citizen can reveal.

    The country will see the money it badly needs slip through its fingers because of its dismal performance in the bank�s annual Country Performance Rating (CPR).

    The setback also comes at a time when Tanzania has slipped five places in the World Bank�s Doing Business due to its failure to initiate "business-friendly reforms".

    In the World Bank's just-released annual CPR, the country dropped seven places and now ranks below Ghana, Burkina Faso, and Madagascar.

    The CPR determines how much money a country can borrow from the World Bank.

    "The consequence of this drop in ranking is a reduction in the overall lending from the World Bank of $312 million (about Sh405.6 billion) for the period covering July 2008 to June 2011," an expert, familiar with workings of the bank, told The Citizen in Dar es Salaam yesterday.

    The World Bank compiles CPR by combining 17 criteria, including macro-economic management and debt policy, but also trade policies and the business environment.

    The rating covers gender, the quality of public administration and the performance of outstanding WB loans.

    Tanzania has dropped mainly due to a downgrading in financial management, transparency and accountability and corruption in the public sector.

    But contacted yesterday, Finance and Economic Affairs minister Mustafa Mkulo said he would only be able to comment after thoroughly reading the CPR report.

    "I have not read the report on the ratings so far. Please, give me time to read it before I make any comment," he told The Citizen by telephone.

    According to the report, Tanzania� s slip in rating has to a lesser degree been caused by changes in gender equity and exchange rate fluctuations.

    The country is now ranked 16th, down from the 10th position it held in the 2007 rating. Uganda improved by two places to 19th from 21st, while, Kenya dropped from the 27th to 30th place.

    "This ironically means that the ministry of Finance will have less access to soft loans from the WB. Instead of being able to borrow $2,157 million (over Sh2.8trillion) between 2008 and 2011, Tanzania will now be able to borrow $1,845 million (about Sh2.4 trillion). The money 'lost' will be re-allocated to other countries," the expert explained.

    But the country, which has yet to recover from being denied money that could have helped to finance the Budget, which donors supported by almost 40 per cent, is still in for more bad news.

    The 2010 Doing Business Report by the World Bank and the International Finance Corporation (IFC), which was launched on Wednesday in Washington, DC, places Tanzania among countries that have failed to ease business regulation.

    The country was ranked 131st, with zero reforms implemented between June last year and May this year. Just like Tanzania, Burundi, the poorest of the five East Africa Community partner states (the others are Kenya, Uganda, Tanzania and Rwanda), was at position 176, with zero reform being implemented during the same period.

    This is the second time Tanzania has performed poorly in the doing business report.

    In the same report in 2007, Tanzania ranked among the world�s top 10 reformers. But last year, the country slipped three places, clinching the 127th position out of the 181 countries surveyed.

    The EAC bloc's economic giant, Kenya, ranked 95th after making only one reform over the past 12 months.

    Uganda, just like Kenya, managed to only one reform to ease business regulation, and was ranked 112th.

    Ironically, Rwanda, which is among the 48 poorest countries in the world, just like Tanzania, Uganda and Burundi, was ranked as the top global reformer in easing the business regulations based on the number and impact of reforms implemented between June last year and May this year.

    According to the report, Rwanda reformed seven out of the 10 business regulation areas measured.

    The 10 regulations, considered in the report, include starting a business, issuing permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.
    Rwanda's global ranking jumped up from the 143rd to the 67th position this year.

    In the past one year, Kigali has introduced new laws that simplified business start-up and strengthened minority shareholder protections.

    A Rwandan entrepreneur now needs to go through just two procedures within three days to start a business. Imports and exports are more efficient, and transferring property takes less time, thanks to a re-organised registry and statutory time limits.

    "Investors have more protection, insolvency re-organisation has been streamlined, and a wider range of assets can be used as collateral to access credit," the report reads in part.

    Being the seventh in a series of Doing Business publications by the WB and the IFC, the 2010 report shows that Mauritius is the business-friendliest country in Africa. Others in the Top 10, include South Africa, Botswana, Namibia, Rwanda, Tunisia, Zambia, Ghana, Kenya, and Papua New Guinea.
  2. J

    JokaKuu Platinum Member

    Sep 12, 2009
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    ..ama ripoti inachanganya au mwandishi hajaisoma vizuri ripoti.

    ..kwanza kuna sehemu mwandishi au sijui niseme ripoti inaeleza kwamba Rwanda wamefanya reforms nyingi, na Kenya wame-perform vibaya.

    ..mwisho mwandishi anataja nchi 10 ambazo ndiyo most business-friendly in Africa. kitu cha ajabu ni kwamba Kenya is in the list.
    Last edited: Sep 12, 2009
  3. Cynic

    Cynic JF-Expert Member

    Sep 12, 2009
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    Kweli. Hata Papua New Guinea anaitaja kama nchi ya Kiafrica!
  4. I

    Interested Observer JF-Expert Member

    Sep 13, 2009
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    Papua New Guinea in Africa!!!! kazi kweli kweli
  5. BAK

    BAK JF-Expert Member

    Sep 17, 2009
    Joined: Feb 11, 2007
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    EU set to freeze 100m euros in aid to Tanzania

    LIKE the World Bank before it, the European Union (EU) has decided to get tough with Tanzania over the slow pace of investigations and prosecutions of various cases of grand corruption, by freezing substantial aid money until better results are seen, THISDAY has reliably learnt.

    According to impeccable sources within the diplomatic community, the EU will withhold or delay disbursement of 100 million euros (approx.180bn/-) that had earlier been promised to the government as budgetary support.

    The sources told THISDAY that the move follows the EU's dissatisfaction with explanations offered by the government of why grand corruption cases already in court have been progressing so slowly and why other similar big graft scandals have not even landed in court yet, over the course of the past year.

    The EU has been irked by what it sees as unconvincing explanations offered by the government over the way it is handling corruption scandals so far, to the point of deciding to freeze the disbursement of 100m euros in budgetary support for the time being,? a well-placed source confirmed.

    The source said the EU is still seeking more detailed explanations from the government over the delays in bringing grand corruption cases already in court to conclusion and initiating prosecution proceedings in similar cases that are still reportedly at the stage of investigation.

    Cases which are said to have been directly mentioned as examples in this context include those involving the mysterious Kagoda Agricultural Limited company and the infamous Richmond power generation fiasco.

    The head of delegation of the European Commission in Tanzania, Tim Clarke, and head of cooperation Enrico Strampelli were not immediately available for comment over the reported aid freeze as both were reportedly attending a regional seminar in Lusaka, Zambia.

    Nevertheless, such a move would bring the EU in line with institutions like the World Bank, which earlier this week categorically declared a similar cut-down in aid to Tanzania, also citing the country's perceived slow pace in imposing and consolidating public finance reforms, transparency and accountability.

    The end result of the World Bank's move is that Tanzania will now receive SDR 739.8 million - or about $1.15bn - in the 2010 and 2011 fiscal years, representing a reduction of about $312m from what had initially been allocated to the country.

    "The reduction reflects the weaknesses in the (country's) institutional environment which have allowed the occurrence of serious corruption activities in areas central to the management of the economy," the bank said in a statement.

    The EU itself last year also delayed disbursement of almost 555 million euros (approx. 980bn/-) in general budget support to Tanzania due to what it described as the government's failure to meet agreed conditions including improvements in transparency and accountability and prosecution of public officials involved in corruption.

    Contacted for comment in Dar es Salaam yesterday, the Minister for Finance and Economic Affairs, Mustafa Mkullo, said he had not received any official communication from the EU on the latest reported aid freeze.

    ?I have not been notified of any delaying or freezing of aid from the EU. But if that is to be the case, they will certainly be informing us soon, ? Mkullo told THISDAY.

    He said as minister responsible for such matters, he would have expected to have received such news. ?Unless there is someone else within the government who may have received such information...but with regard to my office, that has not been so, ? he added.

    General Budget Support (GBS) is provided by 14 donors in Tanzania, and together with the Highly Indebted Poor Countries initiative (HIPC) relief, contributes 20 per cent of public expenditure.

    GBS money is supposed to go straight to the Treasury, not earmarked for any specific expenditure but allowing the government to increase its overall spending.

    But like the ordinary Tanzanian taxpayer, GBS contributors generally like to know what plans are on the ground for deploying the funds, how these plans are progressing, and how the money is actually spent in the final analysis.
    Last edited: Sep 17, 2009