Category Archives: Politics

REPORT ON RICHMOND SCANDAL

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Dr Mwakyembe prior to delivering his report in DodomaDr Mwakyembe prior to delivering his report in Dodoma

It is understood that the Richmond saga began when plans were being made for the construction of an oil pipeline from Dar es Salaam to Mwanza. There was intense international competition to obtain the construction contract. Eventually it was awarded to a hitherto unknown American company called Richmond Development Company. It soon became apparent however that this company was not able to do the job.

In 2006 Tanzania faced a serious crisis in electricity supply and, as an emergency measure Richmond was awarded a contract to supply generators to provide 100 megawatts at a cost of TShs 172 billion. The generators failed to arrive on time and when they did they did not work as required.

The pipeline was never built and the generators were provided by another company. Under part of the contract however the government agreed to pay some $137,000 a day regardless of the amount of electricity provided. Opposition MP’s began to smell a rat and the House of Assembly set up a Select Committee to investigate the whole saga under the chairmanship of the ruling CCM party’s Kyela MP Dr Harrison Mwakyembe. The committee worked diligently and eventually came up with a 165- page report.

MP’s shocked and angry
On February 8 the Guardian described what happened when Dr Mwakyembe read his report to Parliament: ‘Courteous norms and sugar-coated language were set aside as fiery MP’s spoke with bitterness as they contributed to the debate on the findings of the select committee. Opposition and government CCM MP’s spoke with one voice in criticizing the contract imposed by top government officials on TANESCO…. It was a ‘born-again’ Parliament, with MP’s clearly stating that the time for tolerating vice and the signing of bad contracts by ministers and other public officials while Parliament looked on helplessly were gone for good. After hearing the committee’s findings they said: “It’s time we (legislators) joined hands. It is time we worked together regardless of our political differences in matters of public interest. We have to protect the welfare of millions of Tanzanians who are dying simply because of problems caused by these dubious contracts” MP’s said. Anna Komu (opposition CUF MP) said “The squandered TShs 200billion were equivalent to the annual budgets of the ministries of Education and Community Development and Gender, and Children’s Affairs. Philemon Ndesamburo (opposition CHADEMA MP), asked the President to drop the head of the PCCB anti-corruption authority and Attorney General from the task force investigating the BoT scandal and said that those behind the Richmond contract should be taken to court and have their property confiscated by the state. “In other countries, such people are hanged in public” he said.

The Select Committee Report

Dr Mwakyembe told parliament that his committee had proved beyond reasonable doubt that Richmond did not deserve to be awarded the tender for the generators. “We would like to announce in this Parliament that Richmond Development Company LLC, which won the tender and eventually signed a contract with TANESCO on June 23, 2006 lacked experience, expertise and was financially incapacitated.” The firm had no share records or registration in the US or Tanzania and the whole bidding process had been marred by corruption and gross irregularities. Richmond had later passed its contract to Dowans Holdings. Dr Mwakyembe came up with 16 recommendations to make those responsible for ‘this shameful act’ pay for their misdeeds.

He said that due to the fact that the final selection of Richmond as the successful bidder was done by Prime Minister Edward Lowassa himself on June 21, 2006, and due to the fact that he had exerted pressure to have Richmond awarded the tender, it was upon him to ponder over his responsibility to the nation.

Nazir Karamagi
The committee also proposed that the Minister for Energy and Minerals, Nazir Karamagi, be taken to task for barring TANESCO from withdrawing from the agreement which it wished to do. The committee said Karamagi’s decision indicated that some trusted leaders were out to advance their personal interests at the expense of national interests.

As for a subsequent report by the Prevention and Combating of Corruption Bureau (PCCB), a report which had cleared the Richmond contract, the committee said that this had been a ‘whitewash.’ The committee proposed that immediate changes in the Bureau`s management be made to restore public confidence in it. It was not there to cover blunders.

The committee also proposed that Attorney General Johnson Mwanyika, and his representative, Donald Chidowu, who formed part of the Government negotiation team, be fired immediately for failure to advise the government on the various irregularities. Mwakyembe said his committee had failed to comprehend the degree of arrogance displayed by officials in the Ministry of Energy and Minerals, who had deliberately disregarded the advice of the cabinet on adherence to procurement procedures and had three times ignored technical advice by the Public Procurement Control Authority. The ministry had ended up granting Richmond the contract and rejecting eight other applicants.

Mwakyembe’s committee further advised on the need for the government to abandon the ‘colonial attitude’ that contracts between the government and private companies should remain secret. Parliamentary standing committees should be involved in the early preparations of agreements, Mwakyembe said.

The committee’s report also implicated former Energy Minister Dr Ibrahim Msabaha for the confusion that reigned during the entire process, which had denied possibly more credible companies from the right to win the tender. Mwakyembe said Msabaha was reported to have told MP’s that he had no powers on the irregularities because the company belonged to the ‘big boss’, meaning the Prime Minister. “I am only taken as `Bangusilo,` meaning in the Zaramo language, a ‘sacrificial lamb’ to die for others” – Guardian.

Mwakyembe said that since Richmond falsely presented itself as having been registered in the USA, its proprietors and all collaborators should face justice. Commenting on allegations that the business registration authority, BRELA had allowed the swapping of genuine files of Richmond with fake ones, Mwakyembe said BRELA should submit reports to the relevant ministry on a weekly basis and copies of the files should be preserved by the government separately. The drama continued when CCM MP Lucas Seleli, who was a member of the Select Committee, took to the podium to tear apart earlier allegations made by Prime Minister Lowassa that the committee had condemned him unheard. He challenged the Prime Minister to withdraw his allegations, short of which he would seek the application of Parliamentary Standing Orders to compel the Prime Minister to apologize. The Prime Minister had had a hand in the whole transaction he said.

When Lowassa rose to respond to Seleli’s demand that he withdraw his remarks, he said a line that was contained in the report that had particularly disturbed him was to the effect that ‘The proprietors of Richmond are Prime Minister Lowassa and his close friend (Igunga MP) Rostam Aziz.’ The Speaker sidestepped this issue by inviting other MP’s to contribute to the debate on the findings. Then followed the announcement by the Prime Minister that he intended to reign over the Richmond scandal and the ministers for Energy and Minerals (Nazir Karamagi) and East African Cooperation (Dr. Ibrahim Msabaha) also resigned. Karamagi said the government signed the agreement in good faith because the country was facing power problems – Guardian.

The most heartbreaking factor experienced when collecting evidence, said the chairman, was the fear shown by government officials, including professionals. “The time has come for this House to enact a law that would protect junior officers when giving information to relevant authorities in the interest of the nation.“

After all this, as recently as late April 2008 Richmond was advertising in the press that it was a respectable company – Guardian.

FORMER PRESIDENT MKAPA

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Former President Mkapa remains under attack in the Swahili press for what they allege was his purchase, with his then Minister of Energy and Minerals Daniel Yona, of the Kiwira Coal Mine at a ‘giveaway price.’ Two newspapers owned by Tanzania’s most prominent businessmen Reginald Mengi – Kuli Koni and ‘This Day’ have launched what appears to be a crusade against Mkapa and are alleging that he has been involved in several other corruption cases. One cartoonist had Mkapa busy extinguishing the ‘fire’ in Kenya (he was part of the AU team working on the Kenya crisis) while reporters ask him about the BoT scandal.

Meanwhile Daniel Yona challenged anyone who wants to prosecute him to go ahead. Talking to Nipashe he said that if there were individuals or groups wishing to prosecute him they could do so. He said he was the victim of a smear campaign though he agreed that he had shares in the mine.

GOLD MINING INDUSTRY

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During a visit by Norwegian Prime Minister Jens Stoltenberg to Tanzania, President Kikwete said his government was devising mechanisms to help guarantee smoother operations in Tanzania’s mining sector.

Norway had previously threatened to withdraw shares amounting to $5 billion citing corruption and tax evasion by some mining companies. Kikwete made an impassioned appeal to the government and people of Norway not to withdraw their shares from the sector. He said his government had already acted on the matter by setting up a committee that was expected to come up with a package of measures to make Tanzania`s mining industry operate more efficiently and productively. “We are trying to clear the mess in our mining industry; everything will soon be sorted out,” he stated.

In late April the leader of the opposition in parliament, Hamad Rashid (CUF), accused the Controller and Auditor General of deliberately omitting from his latest report the audited accounts of dubious mining projects. This was a serious omission he said. The report was presented by the chairmen of the House’s Public Accounts and Local Government Authorities’ Accounts Committees, John Cheyo (UDP) and Wilbroad Slaa (CHADEMA) respectively.

PRESIDENT TAKES ACTION – NEW CABINET

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President Kikwete’s actions in encouraging the exposure of corruption and setting up enquiries to find out the truth have received wide praise. Apart from accepting the resignation of three cabinet ministers and then dissolving the whole government over the BoT scandal (see below) the President has been taking other measures which have been publicised in the media.
He appointed Prof. Benno Ndulu as the new Governor of the BoT and also a new Board of Directors. At its first sitting the Board decided to reduce the powers of the Governor especially over the Bank’s Audit Committee. In future the committee would consist of independent members instead of BoT directors. It was also decided that the internal auditor should work independently, reporting directly to the committee as well as to the board. The new Governor quickly removed senior members of staff involved in the operation of the EPA pending a review of their roles. The EPA account was also frozen.

Continue reading →

ZANZIBAR – A BIG DISAPPOINTMENT

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An important conference of some 200 members of the CCM Central and National Executive Committees was held in March, symbolically in Butiama, the home village of the nation’s founding father Julius Nyerere. There were two main items on the agenda – firstly, what to do next in terms of disciplinary action or prosecution of those accused of corruption and secondly, what to do next in Zanzibar after almost two years of detailed negotiations led by the Secretaries General of the CCM and the leading opposition party in Zanzibar, the Civic United Front (CUF), to resolve the ongoing political differences in the Isles.

Hopes in Zanzibar, especially in Pemba which supports CUF overwhelmingly, were high because it had been widely reported that a power sharing agreement (Muafaka) had been finally reached and only needed ratification by CCM’s Central Committee. After what was reported as having been an acrimonious six-hour meeting however it became apparent that elements of the CCM party in Zanzibar, including apparently President Karume of Zanzibar, were not prepared to accept power-sharing with the opposition. The CCM declared that before such an arrangement could be concluded there would have to be a referendum in which the people of Zanzibar would be able to vote for or against such a proposal.

This caused astonishment and anger amongst the opposition parties whose MP’s walked out of the National Assembly meeting in Dodoma and later organised a massive and peaceful protest demonstration in Zanzibar. Much of the national media was also critical of the CCM. The Citizen wrote: ‘The politicians may have their differences but the people still want them to work together in the interests of Zanzibar.’

At the time of going to press CUF announced that it was ruling out any further dialogue with CCM on the dispute but CCM Secretary for Ideology and Publicity, John Chiligati said that it was wrong for CUF to claim that CCM had scuttled the Muafaka. He said: “CUF will march until they get sore feet but their attempts to break off negotiation with CCM will not help them.” Muafaka could not be reached by negotiation teams without the approval of the party leadership. He said the teams merely prepared recommendations. “After CUF gets tired of demonstrating they will return to the table” – Nipashe.

Mwananchi has reported that as people were celebrating the 44th anniversary of the 1964 Revolution in Zanzibar some had begun to ask questions as to what it had really involved. They wanted to apologise for what they did. One of them, Ali Omar Juma (aka Lumumba). declared that he had nightmares remembering how innocent people were hacked, their houses raided and their property robbed. He said the basic aim was to liberate the country, but some of those who joined the crowd had ulterior motives which were ‘inhuman and cruel’.

Deputy Secretary General of CUF (Zanzibar), Juma Duni Haji was later quoted as saying in Nipashe that the 2010 elections would be marred by violence if the Muafaka was not implemented. Speaking at the University of Dar es Salaam on occasion of the 44th year of the Union, Duni said President Kikwete knew full well that without a coalition government there would be no free and fair elections in the island. Talking about the ‘marginalisation’ of opposition supporting Pemba island Pemba, Duni said that of the 15 Zanzibar ministers only one came from Pemba, there was one deputy Minister and only two permanent secretaries.

“GO BACK TO SOCIALISM & SELF RELIANCE”

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by Joseph Kilasara

This year President Kikwete will unveil his third budget which one could say is entirely his own and uninfluenced by the previous legacy. Over the past two years the country has witnessed little or no difference in terms of government’s priorities let alone its approach in addressing our economic development conundrum. Maybe it is because the same political party has been in power since independence – TANU then CCM.

Mwalimu Nyerere listed four requirements needed for a country to achieve development – People, Land, Clean Politics and Good Governance. Interestingly, the last is belatedly a new phenomenon even in business circles worldwide which suggests that Mwalimu was way ahead of his time. In fairness, only two are actually needed to make a country i.e. Land and People. This may explain the countryless Antarctica (although some scientists are currently camping there). Through clean politics we get clean leaders who in turn with good governance formulate the right policies which guide the peoples’ interaction with land to achieve development. Malaysia is 50 yrs free this year while Tanzania is 47th and there perhaps ends their similarities. Of the four ingredients you may wonder which one has eluded our beloved land.

With Mwalimu our economic policy was based on “Ujamaa na Kujitegemea” – Socialism and Self Reliance – which gave the country a clear sense of direction. With Mzee Mwinyi it was Ruksa or liberalisation. Mr Mkapa coined the idea of ‘sell fast at any price’, while Mr Kikwete is taking a slow approach under his ‘new speed, new vigour and new zeal’ mantra.
Interestingly all this time CCM has continued to rightly believe in Mwalimu’s policy of Socialism and Self Reliance. This disparity between what the party believes and what its government is doing may be the main reason for our own undoing. Instead of the party creating clear policies with defined goals which the government should achieve, we have the government dictating party policies which have all but disappeared. In Mwalimu’s own words “Kazi ya chama ni kuweka Sera na kazi ya serikali ni kuzitekeleza” (The job of the party is to set policies and the job of the Govt is to implement them).
Socialism and self reliance as a vision remains as relevant today as it was in 1961. The difference lies in definition and approach. Socialism today means social justice and the right to social mobility while Self Reliance means social and economic empowerment. The privatisation process, major mining projects and energy procurement projects which ignore local ownership can hardly be said as targeted to achieve that. By allowing even up to 100% foreign ownership it goes even against the spirit of programmes like the Black empowerment programme in South Africa or affirmative action in America. The irony here is that our posterity cannot claim racism or apartheid to correct the anomaly. A political party is formed by a group of people with common beliefs and ideals who together sell them to the public to get a mandate to form a government to implement them. Their beliefs and ideals then become the basis of their policies. The difficulty here is that CCM has all but lost the meaning of a political party as it is difficult to see the commonality of beliefs among its members. That is why we see the Bank of Tanzania and Tanesco scandals, the purchase of a presidential plane, the Radar saga, Bujagali, government’s house sales, etc emanating from within. No wonder the president is talking about separating business from politics.
Now, as it appears that the government has halted the indiscriminate privatisation process it is imperative that they go back to the party and formulate clear policies on Socialism and Self Reliance. On protecting the national interest, Tanzania can borrow a leaf from China in its dealings with Mr Rupert Murdoch. He deployed all his capitalist sweets to penetrate the huge Chinese media market only to come out with a wife instead as the Chinese were only interested in technical know-how rather than selling their assets, believing strongly: “China’s profits are for China”. (read: Rupert’s Adventures in China: How Murdoch Lost a Fortune and Found a Wife). Again, China this year, through its state Company Chinalco bought a £7bn stake in Rio Tinto in an attempt to kill the potential merger between Rio Tinto and BHP Billiton’s which, if happened, would create a world steel mining monopoly (about 80% market share) which in turn would affect China’s sources of vital natural resources.
It is from this scenario that the role of the NDC (National Development Corporation) should be revisited to spearhead development and industrialisation of our economy by giving it the technical and financial capacity to invest in strategic industries both at home and abroad. This should be in line with the idea of creating sovereign-wealth funds for investment purposes. The stake to be built up by NDC could in future be divested to the public, while the sovereign funds become a front to earn a return on the country’s foreign reserve instead of letting Jeethu Patel & co find a scam way of utilising it.
The budget
In Mr Kikwete’s first budget one notable pledge was to reduce dependency on donors by increasing revenue collection. Though officially it is claimed that the fundamentals of the economy are strong, some key indicators paint a very different picture. With a 45% budget deficit in 05/06 i.e. 11.5% of GDP, the country is heavily dependent on donor’s generosity. The government tax revenue which in 05/06 was 13.6% of GDP is also heavily dependent on Dar es Salaam which contributed 83.2% with 12 regions contributing less than a percentage point. Of this revenue almost 45% came from import taxes, implying that the internally generated revenue is only 7.5% of GDP. By applying the revenue/GDP ratio, Arusha, which contributed 3.2% of revenue will have contributed 5.7% of GDP while Mwanza (2%) is 3.6%. In the other cities in the country the disparity is enormous! The actual contribution to GDP is however highly influenced by agriculture (30%) which again contributes little in tax revenue.
This gives us a snapshot of the level of economic activity in the country which renders the per capital income (US$319 in 05/06) almost meaningless as the majority of people are outside the economic mainstream. As the new Minister of Finance (Mr Mkullo) also aims to improve revenue collection, not only should he strive to reduce donor dependency but more so the dependency on Dar es Salaam, thus widening the collection net, improving productivity and reducing income disparity. His immediate work is definitely cut out. He will need clear guidance from the Central Bank the structure of whose governance defeats the spirit of corporate governance. The Governor is also chairman of the Board which includes his two deputies and the Ministry of Finance Permanent secretary (his boss), effectively overseeing himself while lacking independence from the government.
Hence the culpability of the government in the bank’s scandals. Granting the bank operational independence, separating the job of Chairman and Governor are key to ensure corporate governance. The Bank can also improve its own image by refraining from post-mortem approaches (reporting after the event) and instead adopt a forward looking approach as this will improve the bank’s credibility which is at an all time low.

In the capital markets the dividend yield on some of the leading shares e.g. Tanga Cement is 13% while the yield on a risk-free 364 days Treasury Bill was also 13% in December 2007. One cannot stop wondering whether the shares are overvalued or it may be the case of investor’s irrational exuberance driving the price upwards. The situation is not different in the case of other leading shares. The stock market needs to ensure investors are well informed about the companies’ performance which is not happening at the moment.

FIGHT AGAINST CORRUPTION – ALLEGATIONS

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PRESIDENT OPENS A PANDORA’S BOX IN FIGHT AGAINST CORRUPTION

Tanzanian government ministers used to be treated with considerable
respect as they toured the country to explain government policies to the people. In recent months however, seemingly encouraged by President Kikwete to reveal corruption whenever they see it, the people have responded actively by heckling ministers as they speak and demanding action against those they accuse.

At the same time the media have begun to pursue corruption with enthusiasm and are causing much embarrassment to the ruling Chama cha Mapinduzi (CCM) Party and the Government. The normally quiescent and divided opposition parties led by CHADEMA, the leading party on the mainland, and including the leading opposition party in Zanzibar the Civic United Front (CUF), and the Tanzania Labour Party (TLP) have joined together in tackling the government on a whole series of corruption related issues.

Nationwide elections for new leaders in the CCM Party made things worse. People witnessed widespread bribery and corruption as competition between candidates became more fierce than ever before.

Meanwhile, the newly created Prevention and Combating of Corruption Bureau (PCCB) with its new powers is also now beginning to show some teeth as it investigates corruption cases around the country. Continue reading →

CORRUPTION – OPPOSITION ON THE ATTACK

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For the first time, the four main opposition parties in the National Assembly, seem to have agreed to work together using corruption as the weapon with which to attack the government. As reported in Tanzanian Affairs No 88, things started going badly for the government in August 2007 when the young CHADEMA MP for Kigoma, Zitto Kabwe, tried to table a motion in the National Assembly to set up an investigation into the signing of an agreement for the Buzwagi gold mine. The Speaker suspended Kabwe because he said he had humiliated the Minster of Energy and Minerals in his speech. During the next few days a big public outcry began against what was described as the excessive length of Kabwe’s suspension – until early 2008.

Zitto Kabwe MP for Kigoma NorthZitto Kabwe- CHADEMA MP for Kigoma North

For the first time CCM began to speak openly about Zitto Kabwe. CCM Deputy Secretary General, Captain Jaka Mwambi, urged care with the issues raised by Kabwe. Addressing an electoral meeting, Mwambi said that Zitto had become a heavyweight. Despite his ‘red card’ (suspension) many people were cheering him and that included CCM members. The opposition had scored a political point and CCM needed to elect good leaders who could stand up and argue cases with him. Continue reading →

FIGHT AGAINST CORRUPTION – REACTIONS

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PUBLIC REACTIONS

Scores of press reports have indicated how much things have changed in Tanzania during recent months. Examples:

The Public Procurement Regulatory Authority (PPRA) is reported to have discovered breaches of regulations in the purchase of cars for various ministries – KuliKoni.

At a public meeting in Singida called by the PCCB, people complained that there was an extortion racket at their regional hospital. The hospital was alleged to be taking bribes in all sections, from reception to the maternity ward and laboratory. The Regional head of PCCB in Singida, said the meeting was the beginning of a series to be held in public institutions to allow people to air their grievances on corruption – KuliKoni. Continue reading →

CCM ELECTIONS

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The CCM held elections for leadership positions all over the country form September to December culminating in a Congress attended by almost 2,000 delegates. The Swahili media published details of what happened: Examples:
– The party nullified the election results for five NEC candidates in Pangani for failure to observe election regulations.
– In Tanga an NEC candidate arrived with a truck full of soft drinks to be distributed to voters but was asked to remove it.
– In a dramatic development on September 5 two MPs from Arusha, David Mollel for Arumeru West, who was vying for a position on the NEC and Lekule Laizer, MP for Longido who was running for the CCM Chairmanship in Arusha Region, and ten other party leaders were arraigned in court on corruption charges.
– In Mwanza the Regional Party Secretary confirmed that he had instructed the PCCB to be in attendance during the polling process to keep an eye on any possible unethical practices. This was after the PCCB (nicknamed “scorpions” by some) caught five party members on corruption charges.
– In Dar es Salaam polling took place at the National Service barracks at Mgulani amid tight security mounted by plain clothed police, national intelligence and the PCCB. Yet bribing was alleged to have taken place in toilets and Police were posted inside and outside the washrooms. Continue reading →