Tanzania to refund Norway Sh2.8bn aid

The government is to refund a total of Sh 2.8 billion to the Norwegian government as settlement for a long running dispute stemming from reported embezzlement of millions of shillings in a Donor backed natural resources development programme.  

 

The Citizen has established that the refund is provided for in the government budget for the 2010/2011 financial year. Members of Parliament are currently in Dodoma debating the ministerial estimates in the Sh11.1 trillion.

 

The refund is expected to end a standoff between the government and Norway over corruption and normalise bilateral relations that was partly strained by embezzlement by public officials of the funds provided by the latter.   

 

In a recent interview with The Citizen, the Permanent Secretary in the Ministry of Natural Resources and Tourism Dr Ladislaus Komba admitted that the government has agreed with Norway to refund the money that was ‘misused’ in the project.

 

Dr Komba said the agreement came after several consultations and meetings between officials of the Norwegian embassy in Dar es Salaam and representatives from the government side. Dr Komba led the team.

 

According to the PS, the Sh2.8 billion would be disbursed to Norwegians soon after the approval by Parliament of the ministry’s budget scheduled for next week.

 

“We shall pay them as soon as our budget is approved by the National Assembly. The vote was also in the general budget that was presented by the Finance and Economy minister Mustafa Mkulo,” said Dr Komba.

The PS maintained that by agreeing to refund the money, it did not mean admission of corruption on the part of the government in this particular amount of money.

 

Dr Komba said about Sh1.2 billion of the total was largely the accumulation of Value Added Tax (VAT) that was wrongly taxed by Tanzania Revenue Authority (TRA) on funds provided under the programme through Norwegian Aid.

 

Efforts throughout the week to get a comment from the embassy following the news were futile. Questions mailed to their offices had yet to be replied. 

Last week however, Mr. Morten Heide, Counsellor, Royal Norwegian Embassy, when asked about the progress in the talks with government said; “There has been an elaborate process to establish the amount of funds, which has not been used in accordance with the agreement. On our side, we are currently awaiting Government of Tanzania's follow-up and actual return of the funds.”

Last year Norway announced it was suspending funding in millions of dollars for the Natural Resources Development Programme following an external audit that revealed embezzlement and theft of money they had granted Tanzania over the last decade.

 

The audit reportedly discovered that $30 million (Sh42 billion) of its funding to a government-run natural resources project was missing. 

 

The report revealed that half the funds may have been “spent on seminars, workshops, per diem, and travel expenses.” 

The external audit report that was leaked to the media indicated that 30 per cent of expenditures that went towards capacity building had no documentation, and that perhaps 50 percent of total programme expenditures were poorly accounted for.

 

However, the Tanzanian government disputed the figure, leading to the standoff. The two governments then opened negotiations over the return of any misused funds and future support for the natural resources sector. Over the programme’s past 12 years support, Norway had given in the upward of $60 million (Sh84 billion).

 

This week Dr Komba suggested only Sh2.8 billion could not be accounted for. He said his Ministry also failed to account for the money paid to casual labours in the field because it had no retirements.

“They (Norway) were also furious on a total of 70 ghost motorcycles that were claimed to have been bought and the ministry has taken stern measures on all those involved, with some landing in court,” Dr Komba said.