Geza Ulole
JF-Expert Member
- Oct 31, 2009
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Tanzania forced to refund embezzled funds to Norway
Zebras cross a road in the Serengeti national reserve on October 25. Mid last year, the Norwegian government suspended funding to the tune of millions of dollars for the Management of Natural Resources Programme. Picture: AFP
Tanzania has once again been forced on the defensive following another financial scandal involving donor funding to the country.
This time, the government has been forced to refund money that was misappropriated by officials at the country's Ministry of Natural Resources and Tourism.
The embassy of Norway in Dar es Salaam confirmed that the funds in question were not used as per the agreement on Management of Natural Resources Programme.
After a long and thorough audit, the ministry has now repaid Tsh2,802,480,600 ($2 million) to Norway.
"Audit reports revealed that part of the funds could not be accounted for, while other expenditures should not have been covered through the programme," said the Royal Norwegian Embassy counsellor Svein Baera.
He said that officials failed to direct the money into development programmes as agreed upon between the government of Norway and Tanzania's Ministry of Natural Resources and Tourism.
All is not lost
According to Mr Baera, the total agreed amount had now been repaid, and the repayment opens the possibility of renewed dialogue between Norway and the ministry.
Mid last year, the Norwegian government suspended funding to the tune of millions of dollars for the Management of Natural Resources Programme, following an external audit that revealed embezzlement and theft of money granted to Tanzania over the past 10 years.
The audit on the Programme discovered that $30 million granted to a government-driven natural resources project was missing.
The report further revealed that half of the funds may have been spent on seminars, workshops, per diem and travel expenses.
The external audit report stated that 30 per cent of expenditures that went towards capacity building had no documentation and that perhaps 50 per cent of total programme expenditures were poorly accounted for by the officials.
The firm that undertook the audit, Baker Tilly DGP and Company, discovered that up to Tsh71 million ($50,700) was spent on motorcycles that were never delivered, indicating misappropriation of funds.
However, the Tanzania government disputed the figures, which lead to a standoff. The two governments then opened negotiations over the return of any misused funds and future support for the natural resources sector.
An official with the ministry told The EastAfrican that the culprits had been taken to court, "But I can't go further than that because these are court cases and it would be wise to make a follow up to know what has been the outcome."
Over the past 12 years, Norway has given more than $60 million to the ministry in support of the project.
In February, a World Bank economist at the Tanzania country office, Emmanuel A. Mungunasi, told The EastAfrican that although some budget deviations are inevitable, the government will need to improve development budget execution, by improved planning, procurement, and physical implementation of quality projects.
"Also, timely and predictable release of funds, especially to infrastructure-intensive ministries, such as the Ministry of Infrastructure Development, the Ministry of Energy and Minerals and the Ministry of Water, is crucial," said Mr Mungunasi.
A programme officer with the Tanzania Association of Non-Governmental Organisations (Tango), Mussa Billegeya, said that despite the continued funding from donors and the World Bank, financial indiscipline was still rife in the country.
Mr Billegeya said various reports by donors reveal widespread misuse of funds.
Ghost projects
"There are billions of shillings said to have been spent on particular development projects but the reality on the ground showed nothing had been done. And yet the government continues to receive donor funds. It is time donors devised a mechanism to ensure funds aren't misused," said Mr Billegeya.
Foreign aid makes up around 10 per cent of GDP, and finances on average 40 per cent of total government outlays. But with the government considering borrowing up to 1 per cent of GDP annually on non-concessional terms through the issuance of sovereign bonds, aid may decline to 8 per cent of GDP by financial year 2011/2012.
The World Bank country director for Tanzania, Burundi and Uganda, John McIntyre, said the bank doesn't fund projects that cannot be financed from one year to the next. Asked about the impact of foreign aid in Tanzania, he said: "The impact is less than it should be because the government does not respect its own formula of allocating funds."
Tanzania is yet to regain the trust of some major donors who recently cut aid provided for general budget support citing the slow pace of implementation of reforms in the country.
The East African: *- News*|Tanzania forced to refund embezzled funds to Norway
Tanzania has once again been forced on the defensive following another financial scandal involving donor funding to the country.
This time, the government has been forced to refund money that was misappropriated by officials at the country's Ministry of Natural Resources and Tourism.
The embassy of Norway in Dar es Salaam confirmed that the funds in question were not used as per the agreement on Management of Natural Resources Programme.
After a long and thorough audit, the ministry has now repaid Tsh2,802,480,600 ($2 million) to Norway.
"Audit reports revealed that part of the funds could not be accounted for, while other expenditures should not have been covered through the programme," said the Royal Norwegian Embassy counsellor Svein Baera.
He said that officials failed to direct the money into development programmes as agreed upon between the government of Norway and Tanzania's Ministry of Natural Resources and Tourism.
All is not lost
According to Mr Baera, the total agreed amount had now been repaid, and the repayment opens the possibility of renewed dialogue between Norway and the ministry.
Mid last year, the Norwegian government suspended funding to the tune of millions of dollars for the Management of Natural Resources Programme, following an external audit that revealed embezzlement and theft of money granted to Tanzania over the past 10 years.
The audit on the Programme discovered that $30 million granted to a government-driven natural resources project was missing.
The report further revealed that half of the funds may have been spent on seminars, workshops, per diem and travel expenses.
The external audit report stated that 30 per cent of expenditures that went towards capacity building had no documentation and that perhaps 50 per cent of total programme expenditures were poorly accounted for by the officials.
The firm that undertook the audit, Baker Tilly DGP and Company, discovered that up to Tsh71 million ($50,700) was spent on motorcycles that were never delivered, indicating misappropriation of funds.
However, the Tanzania government disputed the figures, which lead to a standoff. The two governments then opened negotiations over the return of any misused funds and future support for the natural resources sector.
An official with the ministry told The EastAfrican that the culprits had been taken to court, "But I can't go further than that because these are court cases and it would be wise to make a follow up to know what has been the outcome."
Over the past 12 years, Norway has given more than $60 million to the ministry in support of the project.
In February, a World Bank economist at the Tanzania country office, Emmanuel A. Mungunasi, told The EastAfrican that although some budget deviations are inevitable, the government will need to improve development budget execution, by improved planning, procurement, and physical implementation of quality projects.
"Also, timely and predictable release of funds, especially to infrastructure-intensive ministries, such as the Ministry of Infrastructure Development, the Ministry of Energy and Minerals and the Ministry of Water, is crucial," said Mr Mungunasi.
A programme officer with the Tanzania Association of Non-Governmental Organisations (Tango), Mussa Billegeya, said that despite the continued funding from donors and the World Bank, financial indiscipline was still rife in the country.
Mr Billegeya said various reports by donors reveal widespread misuse of funds.
Ghost projects
"There are billions of shillings said to have been spent on particular development projects but the reality on the ground showed nothing had been done. And yet the government continues to receive donor funds. It is time donors devised a mechanism to ensure funds aren't misused," said Mr Billegeya.
Foreign aid makes up around 10 per cent of GDP, and finances on average 40 per cent of total government outlays. But with the government considering borrowing up to 1 per cent of GDP annually on non-concessional terms through the issuance of sovereign bonds, aid may decline to 8 per cent of GDP by financial year 2011/2012.
The World Bank country director for Tanzania, Burundi and Uganda, John McIntyre, said the bank doesn't fund projects that cannot be financed from one year to the next. Asked about the impact of foreign aid in Tanzania, he said: "The impact is less than it should be because the government does not respect its own formula of allocating funds."
Tanzania is yet to regain the trust of some major donors who recently cut aid provided for general budget support citing the slow pace of implementation of reforms in the country.
The East African: *- News*|Tanzania forced to refund embezzled funds to Norway
