macho_mdiliko
JF-Expert Member
- Mar 10, 2008
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Finland plans to freeze part of the direct budget funding it had planned to give to Tanzania over suspicions of corruption.
Finland has provided aid to the East African country for decades.
"The sum to be frozen is two million euros. Another option would be for Finland to pay the sum in two consignments after Finland has been given a more detailed report on the misappropriations", says Keijo Ruokoranta of the Ministry for Foreign Affairs.
Finland is donating EUR 31 million in aid to Tanzania this year, about half of which involves direct input into the national budget. Now plans are to freeze two million of that amount. Ruokoranta emphasises that the money is not party of Finland's development cooperation funding.
Two extensive cases of corruption were uncovered in Tanzania this spring. An audit of the country's central bank uncovered discrepancies worth 110 million US dollars, after which President Jakaya Kikwete removed the director of the bank.
The fraud involved commercial debt accrued in the 1970s and 1980s. At that time Tanzania's economy was in a confused state, and special arrangements were made for imports in order to maintain currency reserves. Some of the old commitments were sold on to dummy corporations. These debts have been paid off gradually from the 1990s.
Another case involved overcharging for electricity using dummy corporations.
Ruokoranta says Finland has not received detailed information about those involved in the corruption. "These matters will be discussed in negotiations to be held in Tanzania", he says.
Tanzania gets monetary support from 11 countries. Finland has taken the most severe line on misuse of the funding. Apparently Germany is the only other country to consider the partial freezing of funds.
Ruokoranta says that some of the money has been recovered. In any case, Tanzania lost a significant amount of income that could have been used for reducing poverty, for instance.
The Finnish Foreign Ministry feels that confidence in the administration Tanzania's public finances has suffered considerably, and that possibilities for continued cooperation need to be reassessed.
Sorce:
Helsingin Sanomat, Friday, 7.3.2008
http://www.hs.fi/english/article/Finland+freezing+part+of+its+aid+to+Tanzania/1135234630400
Finland has provided aid to the East African country for decades.
"The sum to be frozen is two million euros. Another option would be for Finland to pay the sum in two consignments after Finland has been given a more detailed report on the misappropriations", says Keijo Ruokoranta of the Ministry for Foreign Affairs.
Finland is donating EUR 31 million in aid to Tanzania this year, about half of which involves direct input into the national budget. Now plans are to freeze two million of that amount. Ruokoranta emphasises that the money is not party of Finland's development cooperation funding.
Two extensive cases of corruption were uncovered in Tanzania this spring. An audit of the country's central bank uncovered discrepancies worth 110 million US dollars, after which President Jakaya Kikwete removed the director of the bank.
The fraud involved commercial debt accrued in the 1970s and 1980s. At that time Tanzania's economy was in a confused state, and special arrangements were made for imports in order to maintain currency reserves. Some of the old commitments were sold on to dummy corporations. These debts have been paid off gradually from the 1990s.
Another case involved overcharging for electricity using dummy corporations.
Ruokoranta says Finland has not received detailed information about those involved in the corruption. "These matters will be discussed in negotiations to be held in Tanzania", he says.
Tanzania gets monetary support from 11 countries. Finland has taken the most severe line on misuse of the funding. Apparently Germany is the only other country to consider the partial freezing of funds.
Ruokoranta says that some of the money has been recovered. In any case, Tanzania lost a significant amount of income that could have been used for reducing poverty, for instance.
The Finnish Foreign Ministry feels that confidence in the administration Tanzania's public finances has suffered considerably, and that possibilities for continued cooperation need to be reassessed.
Sorce:
Helsingin Sanomat, Friday, 7.3.2008
http://www.hs.fi/english/article/Finland+freezing+part+of+its+aid+to+Tanzania/1135234630400