Donors warn Dar over continuing silence on graft Special Correspondent EAST AFRICAN The European Union has threatened to delay budget support to Tanzania if it does not respond swiftly to the corruption allegations against powerful individuals in the government and parliament that have rocked the country in the past few months. Any such delay would adversely affect the 2007/2008 national budget, dealing a blow to Tanzanian economic growth, which has been accelerating for the past five years. Karel van Kesteren, ambassador of the Kingdom of the Netherlands, told The EastAfrican in Dar es Salaam last week that timely, robust and credible responses by the government on corruption allegations are necessary and would send positive signals to potential investors, governments, parliaments and taxpayers in donor countries. "But it is not only the big corruption that bothers me. Equally destructive for confidence in the country is corruption at lower levels, where the private interests of some influential individuals seem to carry more weight than the interests of the poor," Mr van Kesteren said. According to the envoy, the Netherlands government is gravely concerned about the corruption allegations related to the Bank of Tanzania external payments account, which is now subject of an independent external audit, and reports of corrupt practices related to management of natural resources of the country. During the 2007/2008 budget, the Netherlands pledged to a total of $100 million in aid to Tanzania annually, the bulk of which will go to support the budget, 40 per cent of which is funded by donors, especially European Union member states. The country's development partners and international financial institutions have promised to provide grants and concessional financing of a total of $2.5 billion (Tsh2.549 trillion) in 2007/2008, of which $881 million come under general budget support. Peter Maddens, head of the EU office in Tanzania, told The EastAfrican that the EU member states will in October this year review their national budget support. Mr Maddens said that the review would help the development partners track progress and performance across a range of issues, including public financial management at the government level, amid a deluge of allegations of misuse of public funds. "Freezing aid is not on our radar screen. Indeed, development partners and the government of Tanzania will shortly be reviewing progress on its performance across a range of issues," he said, adding that development partners also need to justify spending their own taxpayers' funds. According to the EU official, the government has failed to issue a comprehensive statement on the allegations even though, "In a democracy, the government is held to a higher standard than the opposition," he said. The EU threat comes just as Tanzania is hosting a high-profile World Trade Organisation (WTO) meeting mobilising Aid for Trade in Africa, where most of the country's development partners including the World Bank and the International Monetary Fund will be in attendance. Ingo Herbert, deputy ambassador of Germany, said the Tanzania government should respond to the accusations levelled against some its top officials because donors are becoming uncomfortable and wish to know the truth. "The allegations of graft being levelled against some officials by opposition politicians are very serious; we would like the government to give its side of the story as soon as it possibly can," said Mr Herbert. The ambassador's challenge to the government follows the unified opposition parties' move to disclose details and lists of people in the government who are allegedly misusing the government funds. In December 2006, the government, together with 19 development partners signed a memorandum of understanding committing their respective countries and institutions to implement the Joint Assistance Strategy for Tanzania (JAST). Among other things, the strategy requires development partners to increase official development assistance and channel their financial assistance through general budget support as the preferred modality. The strategy also provides for a division of labour among development partners on the one hand and the government on the other. This should be based on respective comparative advantage among the donors. Further, the strategy emphasises the need for government leadership and ownership of the development process. The government is also responsible for setting priorities and determining the choice of technical assistance needed, without unnecessary influence by development partners.