Dar loses $25m from stimulus package

[nngu007]

By MIKE MANDE, The Eastafrican

Posted Sunday, June 5 2011 at 12:18


A fresh financial fraud has hit Tanzania with revelations that tens of millions of dollars from the economic stimulus package could have been embezzled, punching holes into President Jakaya Kikwete administration’s ability to stop public sector corruption.


The EastAfrican has learnt that officials in both the government and the private sector could have colluded in the misappropriation of the funds, as they could not account for over Tsh40 billion ($25 million) under the economic stimulus package released by the central bank and donor partners. The funding was part of the Tsh17 trillion ($10.9 billion) released during the 2008/2009 financial year to jump start the economy.

Lawyers and legislators are calling for investigations of the beneficiaries of the funds, with some firms already saying they did not receive funds meant for them.


Among other things, the rescue package was to offset losses incurred by cash crop exporters during the 2008/2009 fiscal year when the economy was facing difficulties.


“The beneficiaries are known but the government does not want to take measures against them,” said a source.


In the 2008/2009 financial year, the Bank of Tanzania provided $1.2 million stimulus package, while the Tanzania Investment Bank (TIB) disbursed Tsh20 billion ($12.9 million) into the economy as well as an additional Tsh20 billion ($12.9 million) to be used specifically for low-interest farm inputs.


Freeman Mbowe, the leader of Opposition parties in parliament said that money from the stimulus package was particularly vulnerable to fraud because almost all the money was being disbursed electronically and could have been swindled. Mr Mbowe said that the opposition will seek an explanation from the government on the whereabouts of the money and that those those implicated should refund it.


The private sector led by those in industry have also complained that the funds did not reach some of the intended beneficiaries and it was not sufficient for those who got it. They said that the world economic crisis made it difficult for the government to release the extra funds it had earmarked for various sectors.


Hussein Kamote, the director of Policy and Research at the Confederation of Tanzania Industries (CTI) told The EastAfrican that the stimulus package was not self-sufficient and needed the government’s intervention in urging commercial banks to reduce interest rates so that the private sector could borrow comfortably.


“The package was not that big to jump-start the economy at the right velocity,” he said, adding that the two-digit inflation has also increased the cost of lending.

 

[BAK]

Dar loses $25m from stimulus package

By MIKE MANDE,
The Eastafrican
Posted Sunday, June 5 2011 at 12:18


A fresh financial fraud has hit Tanzania with revelations that tens of millions of dollars from the economic stimulus package could have been embezzled, punching holes into President Jakaya Kikwete administration's ability to stop public sector corruption.


The EastAfrican has learnt that officials in both the government and the private sector could have colluded in the misappropriation of the funds, as they could not account for over Tsh40 billion ($25 million) under the economic stimulus package released by the central bank and donor partners. The funding was part of the Tsh17 trillion ($10.9 billion) released during the 2008/2009 financial year to jump start the economy.


Lawyers and legislators are calling for investigations of the beneficiaries of the funds, with some firms already saying they did not receive funds meant for them.

Among other things, the rescue package was to offset losses incurred by cash crop exporters during the 2008/2009 fiscal year when the economy was facing difficulties.


"The beneficiaries are known but the government does not want to take measures against them," said a source.


In the 2008/2009 financial year, the Bank of Tanzania provided $1.2 million stimulus package, while the Tanzania Investment Bank (TIB) disbursed Tsh20 billion ($12.9 million) into the economy as well as an additional Tsh20 billion ($12.9 million) to be used specifically for low-interest farm inputs.


Freeman Mbowe, the leader of Opposition parties in parliament said that money from the stimulus package was particularly vulnerable to fraud because almost all the money was being disbursed electronically and could have been swindled. Mr Mbowe said that the opposition will seek an explanation from the government on the whereabouts of the money and that those those implicated should refund it.


The private sector led by those in industry have also complained that the funds did not reach some of the intended beneficiaries and it was not sufficient for those who got it. They said that the world economic crisis made it difficult for the government to release the extra funds it had earmarked for various sectors.


Hussein Kamote, the director of Policy and Research at the Confederation of Tanzania Industries (CTI) told The EastAfrican that the stimulus package was not self-sufficient and needed the government's intervention in urging commercial banks to reduce interest rates so that the private sector could borrow comfortably.


"The package was not that big to jump-start the economy at the right velocity," he said, adding that the two-digit inflation has also increased the cost of lending.

 

[politiki]

There are two types of evils those who are doing evil things and those who see it(like jk) and ignore to stop it.