How corruption rocked Kikwete's govt in the past decade

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President Jakaya Kikwete 

By Athuman Mtulya Election Platform Reporter

Posted  Wednesday, June 24  2015 at  09:41

IN SUMMARY

National Coordinator of Tanzania Human Rights Defenders Coalition (TDHRC) Mr Onesmo Olengurumwa said although President Kikwete played some role in the transparency but the credit must be directed to other institutions which played bigger role in exposing corruption.

Dar es Salaam. They came one after the other, shaking the country to the core in ways never witnessed before, forcing multiple cabinet reshuffles. They are non-other than mega corruption scandals. These “monsters” have haunted President Jakaya Kikwete’s administration like a never ending nightmare in the ten years he has been in office. It all started in his first year in office in 2006 when the Controller and Auditor General’s (CAG) called for special audit of the Sh133 billion Bank of Tanzania’s External Payment Arrears (EPA) account. It turned out to be the first major corruption scandal in President Kikwete’s administration. An Ernst & Young audit found out that about Sh133 billion had been wrongly and dubiously been paid to some 22 local companies during the financial year 2005/06. The EPA scandal shook the nation and eroded the credibility of both the government and the central bank (BoT). The BoT’s credibility would further been tarnished by revelations that the construction cost of the twin tower headquarter building was inflated by Sh222 billion. Both scandals led to the firing of the then BoT governor Daudi Balali and the appointment of the new one, Prof Benno Ndulu in 2007.

The revelation of the EPA scandal was picked up by the official opposition in Parliament, the civil society and the media and led to a public outcry that prompted President Kikwete to act. Donors also threatened to cut off aid. Companies were ordered to refund the money and some few culprits were taken to court and jailed. Activists and the opposition scoffed at the decision to let people return the money. They also claimed that only small profile players were taken to court with the “bigger fish” walking scot free.<script async src="//pagead2.googlesyndication.com/pagead/js/adsbygoogle.js"></script>
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A few months later Kikwete’s government was hit by yet another scandal, popularly known as the Richmond scandal. In 2006 as the nation faced serious power shortages due to drought the government invited investors to apply for the production and supply of over 100 megawatts. A US-based Richmond LLC scooped the tender.

However, it soon emerged that the whole process was marred by irregularities costing the country a loss of Sh172 billion. The parliamentary select committee chaired by Dr Harrisson Mwakyembe found out that Richmond was but a briefcase company. In February 2008 Edward Lowassa resigned from his position as Prime Minister after being implicated in the scandal. Two other cabinet ministers also resigned.

Mr Kikwete dissolves the cabinet and picked Mizengo Pinda as the new Prime Minister. The manner in which President Kikwete dealt with the two scandals set the tune for his reactions to future scandals. And a pattern, very ironic, emerged; a scandal is revealed. Public outcry ensues; donors threaten to cut off aid. President Kikwete reacts most often by forcing or sacking implicated public officials. But that would be, mostly, the end of the story. The judicial process very rarely took its course. And no mechanism would be put to stop further corr 

Even as the details of the Richmond scandal were being unveiled the fiery, youthful politician, Zitto Kabwe, dropped a bombshell in government in July 2007; the then minister for Energy and Minerals Nazir Karamagi had gone to London and, in a hotel room, signed a new Mineral Development Agreement with a major global gold producer, Barrick Gold, to develop a new mine, Buzwagi gold mine, to be located just a less than ten kilometres from Kahama Town.

The minister entered the agreement after the agreement had promised not to enter into further agreement with investors pending the review of the old gold mining contracts and the creation of the new law to ensure the nation benefits from its golden resources. The revelations that a new mineral contract had been entered despite these promises were perceived as backstabbing the public. Mr Zitto, however, having been allowed to move a private motion on the issue was suspended from Parliament after failing to prove some claims and that was the end of the story.

That was not the end of corruption mega scandals. Soon after it transpired that Tanzania had paid a “ten percent commission” to middlemen in the purchase of military radar from the UK’s BAE Systems during President Benjamin Mkapa’s administration. The then minister for Infrastructure Andrew Chenge was forced to resign after being implicated. The UK firm was ordered to refund the money to Tanzania.

Corruption and embezzlement of public funds scandals kept on haunting President Kikwete’s cabinet. Revelations kept coming in of irregularities and possible corruption in privatization deals and other issues such as in the Kiwira Gold Mine, Tanzania Telecommunications Company Limited (TTCL), Kilimanjaro International Airport (KIA), Tanzania International Container Terminal Services (TICTS) and Tanzania Railways Corporation (TRC) and

M/S Alex Stewart (Assayers) Government Business Corporation (ASAGBC) as well as plundering of public funds by falsification with specific reference to Tangold, Meremeta, and Deep Green conspiracies. The ASAGBC scandal was handled differently with the big fish involved hauled to court. The cases are still pending in court.

The last of the scandals was the Tegeta escrow account in which Sh306 billion was siphoned out of the Central Bank late in 2013 irregularly and deposited to various bank accounts in two banks. Tanzania Electric Supply Company (Tanesco) and Independent Power Tanzania Limited (IPTL) jointly owned the account following a tussle over capacity charges.

The money would have to be paid only after the resolution of the court case involving the two parties. Mr Kikwete’s cabinet was exposed again, and led to the resignation of Attorney General Judge (rt) Fredrick Werema and former Minister for Energy and Minerals Prof Sospeter Muhongo and the sacking of Lands, Housing and Human Settlements Minister Prof Anna Tibaijuka.