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- Feb 11, 2007
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By Athuman Mtulya @mtulya amtulya@tz.nationmedia.com
Dar es Salaam. The conspicuous absence of Tanzanian politicians and government officials on the list of people stashing away large sums of money in offshore accounts has raised questions about where and how corrupt bigwigs hide their ill-gotten gains.
Hundreds of millions of US dollars have been looted in Tanzania through various scandals such as Mereremeta, EPA Account, Mwananchi Gold, Tegeta Escrow Account, and BAE Systems Radar scandal.
The External Payment Arrears (EPA) Account rip-off involved Sh133 billion that was irregularly paid by the Bank of Tanzania (BoT) between 2005 and 2006 to a dozen of firms, some of them fake. The rush to convert the cash from local currency into the dollar by the culprits sent the value of the shilling tumbling in 2006. Around the time senior government officials inflated the cost of constructing the BoT Twin Towers to more than Sh400 billion.
Then there was the £28-million radar purchase scandal from UK’s BAE Systems Company in 2008.
To facilitate the deal the UK military equipment firm had to pay about £12 million to middlemen and Tanzanian government officials.
There were also the Mwananchi Gold and Mereremeta scandals involving misappropriation of $6 million and $118 million respectively. In 2014 it resurfaced that about Sh306 billion from the Tegeta Escrow Account was paid to various individuals. Government officials and politicians were implicated in the deal. And the list continues.
There were strong indications in some cases and evidence in others that most of the loot from these corruption scandals was transferred out of the country but the details released by the International Consortium of Investigative Journalists (ICIJ) on Monday included the names of at least 45 businessmen but did not include the name of a single politician or government official. The situation was different in other countries where heads of state, other politicians and government officials were named in the Panama Papers and forced by their voters to address their links to the offshore tax havens. Iceland’s Prime Minister Sigmundur David Gunnlaugsson had to resign after being named in the Panama Papers. Possible reasons for the conspicuous absence of Tanzanian politicians in the Panama Papers are:
Using middlemen
There is a strong possibility that Tanzanian politicians and some government officials use the names of other people to hide their wealth.
The executive director of the Concern for Development Initiatives in Africa, Mr Bubelwa Kaiza, and a political science lecturer at the University of Dar es Salaam, Mr Richard Mbunda, also say that can be possible.
“There is a trend in this country that when they (top leaders) want to steal they will use Tanzanians of Asian origin. These middlemen will operate as their proxies in each and everything including transferring the funds and running of the offshore accounts,” Mr Kaiza says.
Mr Kaiza calls this Tanzania’s political anthropology. Some scholars have called it crony capitalism. “It is nearly impossible to find the name of any Tanzanian leader or former or politician directly implicated in the leak or any of such nature. But that does not mean they are not corrupt or that they do not operate offshore accounts.”
Mr Mbunda argues that the Tanzanian ruling class is not that exposed to the murky ways of tax havens and therefore prefers to use camouflage in hiding “dirty money” to avoid detection.
Connecting the dots
If further investigations are made using details from the Panama Papers documents it is possible to find out which politicians and government officials are linked to the 45 business tycoons listed. In fact observers say some of the tycoons mentioned in in the Panama Papers documents have strong political connections established over a long period of time. In fact some of them were politicians themselves.
“Well, I understand that not all the individuals mentioned [in the Panama Papers] are corrupt, but do we have to wait for the ICIJ to tell us that some of those Tanzanians mentioned are involved in major corruption scandals and they also have direct links with current and former leaders?” Mr Kaiza queries.
Limited scope of ICIJ public leaks
The ICIJ database drawn from Panama Papers does not include all the names of offshore company owners. This is because that information “is often buried in emails, power-of-attorney letters and internal notes of Mossack Fonseca employees and cannot easily be extracted in a systematic manner,” the ICIJ says in its website. Moreover what is revealed is only a fraction of the information contained in the Panama Papers.
Kigoma Urban MP and anti-corruption campaigner Zitto Kabwe also argues along the same line. He says Tanzanians should exercise patience as more information is being revealed. Tanzania could prefer tax havens that are closer such as Dubai and Mauritius and Seychelles, whose details have been minimal.
“Once more leaks from the three heavens are exposed, then definitely we will know more about Tanzanians hiding their wealth outside the country,” says Mr Kabwe. “While we were probing the Meremeta scandal, we found out that $153 million was transferred from Tanzania to Mauritius, but we don’t know what individuals were involved.”
What should be done?
A tax expert who preferred anonymity says the Panama Papers revelations are just the tip of the iceberg and called for the local accountability organs to probe all individuals and firms of Tanzanian origin mentioned.
“The Financial Intelligence Unit, or FIU, must make thorough investigations to establish that the monies in those offshore accounts were not embezzled or laundered down here. The Tanzania Revenue Authority must probe to ensure that no firm was involved in tax evasion. The investigations can unmask high-ranking politicians and government leaders that we are now asking why they were not featured in the leak.” Mr Kabwe also notes that although not all offshore accounts have been opened illegally, it is important for FIU and the Prevention and Combating of Corruption Bureau to make thorough investigations and check if nothing wrong was committed by all Tanzanians named.
Mr Kabwe notes that the country should introduce a ‘reverse burden of proof’ provision so that corrupt individuals or those involved in illicit trade should be forced to prove how they have legitimately accumulated their wealth as proposed by UK Prime Minister David Cameron.
SOURCE: The CITIZEN
