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Dec 26, 2006
We need weeks to decide on support, says Finland
2008-03-14 09:25:40
By Guardian Reporter

Finland said yesterday it needs a few weeks to know whether the reported massive misuse of funds at the Bank of Tanzania will affect its planned general budget support (GBS) in financial year 2008/09.

This is according to Satu Santala, Charge d`Affaires in the Finnish Embassy in Tanzania, who was commenting on a story published by this paper on Wednesday.

The story was in relation to Finland`s stance regarding the scandal revolving around the 133bn/- central bank External Payment Account (EPA) scam.

Santala said in a statement to this paper that her government is yet to make any definitive decision on whether to cut aid to Tanzania following the scandal reports.

She explained that development partners normally providing GBS to Tanzania were in dialogue with the government as part of a follow-up to recently completed EPA audit.

The embassy official noted that Finland disbursed 8.6 million euro to Tanzania as GBS last year.

She said the government of Tanzania has already been notified on the availability of an additional 2 million euros for the purpose, adding that the release of the money was awaiting the completion of the EPA audit.

She gave the only reason the additional amount had not been disbursed as the non-completion of the audit last year, noting further that last year Finland supported a range of programmes in Tanzania worth over 22 million euros combined.

On Wednesday, this paper quoted a section of the Finnish media as saying that the Finnish government was planning to freeze euro 2 million from its aid package to Tanzania over rampant reports of cases of grand corruption in the country.

However, yesterday`s statement said GBS was an aid modality where earmarked funding is made available to Tanzania to support the implementation of its poverty eradication and economic growth programme.

The statement added that neither was the support used by the central bank nor did it ever go into EPA.

Tanzania has enjoyed Finland`s development co-operation since 1962, and Santala said the warm relations between the two countries had made Tanzania stand as one of the main recipients of Finnish aid.

A recent audit of the Bank of Tanzania?s accounts revealed the dubious payment of over 133bn/- from the bank`s EPA account to 22 companies, some widely believed to be ``briefcase`` ones.

President Jakaya Kikwete has since formed a task force to study the issue, including the full details on the firms.

Finance and Planning minister Mustafa Mkullo told reporters recently that a total of 50bn/- has been recovered, while on Wednesday the task force talked of 60bn/-.

The government`s refusal to name the companies and people believed to have returned the money or give a breakdown of the amounts surrendered has led to complaints from various quarters.

SOURCE: Guardian
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