EPA INVESTIGATION:The moment of truth -TIME RUNS OUT FOR GOVERNMENT AS DONOR CONTEMPLATE AID FREEZE THISDAY REPORTER Dar es Salaam WITH time effectively over for the external payment arrears (EPA) probe team to wrap up its investigation, the government is now under growing pressure from its development partners to prosecute key suspects behind the theft of over 133bn/- from the Bank of Tanzania or face the risk of donors withholding a huge chunk of the general budget support for 2008/09, it has been revealed. Around 34 per cent of Tanzanias 7.2trn/- budget during 2008/09, equivalent to a massive 2.4trn/- solely depends on donor funding. Well-placed sources say a number of donor countries are becoming increasingly impatient with the government over the lack of tangible progress made so far in the high-level EPA investigations led by Attorney General Johnson Mwanyika. Several powerful countries which hold the purse strings are now ready to delay disbursement of the much-needed general budget support until they see serious legal action taken by the government against the well-known suspects behind the scandal, a government source told THISDAY. He added: Some of the donor countries are taking a wait-and-see approach and will not release the pledged budget support until the government prosecutes key suspects in the EPA investigation. The Minister for Finance and Economic Affairs, Mustafa Mkulo, and other senior government officials were this month expected to hold talks with some of the countrys development partners on various issues, including disbursement of the budget support funds. We understand that the position of some of the major donor countries is that they will not release the general budget support funds until they get some serious answers from the Tanzanian government on the EPA issue, said a source within the diplomatic community. Insiders say pressure has been mounting on the government from its development partners to address the recommendations of the special audit of the EPA account at the BoT. The government is at serious risk of losing a substantial amount of donor money if it does not prosecute the EPA suspects sooner rather than later, said another government official. He added: Donor countries are expected to be ruthlessly blunt with Mkulo in the forthcoming meeting and tell him to forget seeing a quick disbursement of budget support funds if the government doesnt seriously address the EPA issue. In January this year, President Jakaya Kikwete gave the EPA probe team a six-month deadline to conclude its investigations and submit its report. Apart from the AG, other members of the high-powered investigation team include Inspector General of Police (IGP) Saidi Mwema and the director-general of the Prevention and Combating of Corruption Bureau. Several other senior officers from the Attorney Generals Chambers, PCCB, Police Criminal Investigations Department (CID) and the Tanzania Intelligence and Security Service (TISS) have also been taking part in the probe. The EPA probe team has been heavily criticized for appearing to focus most of its attention on recovering the stolen funds rather than arresting and prosecuting the involved criminals. When contacted by THISDAY to comment on reports that donors were threatening to withhold budget support over concerns in the fight against grand corruption, Mkulo declined to comment and referred our queries to his Permanent Secretary, Gray Mgonja. I have just arrived from a trip abroad and I am now heading to Dodoma as we speak to take part in the ongoing Bunge session ... I dont have any information concerning the (forthcoming) meeting on budget support, he said. However, Mgonja was yesterday not immediately available for comment. On the other hand, the Deputy Minister for Finance and Economic Affairs, Jeremiah Sumari, told THISDAY that a previous meeting scheduled for July 3 between Tanzanias development partners and Treasury officials was postponed due to Mkulos absence. I dont have any information right now as to when this meeting will be held after being postponed because the Minister for Finance and Economic Affairs (Mkulo) was on an official trip abroad, he said. Asked when the EPA probe team would officially conclude its investigation, the spokesman of the Ministry of Justice and Constitutional Affairs, Omega Ngole, was non-committal. What I can confirm right now is that the (EPA) team is still proceeding with its investigation and will formally announce to the public when it concludes its work, he said. The Tanzanian government lost 4.1bn/- in general budget support from Denmark in 2007/08 after it failed to fulfil its commitment to present the long-awaited anti-corruption legislation to Bunge, although the government ultimately pushed the Prevention and Combating of Corruption Act of 2007 in Parliament. Donors usually link provision of general budget support to key performance indicators, with disbursement contingent on agreed targets being achieved and agreed actions being undertaken. Denmark has a so-called variable tranche as part of its general budget support to Tanzania. This means that for each financial year, 20 per cent of Denmarks general budget support is linked to the achievement of specific, jointly agreed performance criteria. For financial year 2007/08, the 20 per cent variable tranche - equivalent to Danish Kroner 18 million (approx. 4.1bn/-) - was linked to a revised anti-corruption legislation.