Wednesday, October 7, 2009


The ministry of Natural Resources and Tourism (MNRT) has been locked out of Sh110 billion in development aid funding due to corruption concerns in its echelons.
The Norwegian Government blacklisted the ministry from the first ever large-scale field pilot project for climate change and reduced deforestation in the country following audit revelations that officials entrusted with funds it had donated to various projects, embezzled up to $30 million (Sh39 billion) in the last four years.
Its embassy in Dar es Salaam has confirmed that although the ministry was lined up for the funding, it would now not be granted any aid from Norway until the embezzled money was refunded.
Chancellor Ivar J�rgensen, in charge of Environment and Climate Change, told The Citizen that the ministry will miss out of the prestigious Reduced Emissions from Deforestation and Forest Degradation (REDD) scheme in which Norway plans to spend NOK 500 million (Sh110bn) in Tanzania.
"The MNRT will not be able to sign contracts for REDD funds until the audit queries have been settled," said Mr J�rgensen in an email communication.
Despite the MNRT hitch, the Tanzanian government acted fast and secured the same funding, which will however now be channeled through the Environment Division in the Vice President's Office. Signing of the REDD contract took place in Dar es Salaam on August 20.
Authorities have given assurances that officials implicated in the said embezzlement would be prosecuted. Norway also wants the Ministry to demonstrate better capacity to manage money, both when it comes to staff qualifications and financial management systems.
Yesterday, the Natural Resources and Tourism Minister Samsha Mwangunga would not immediately comment on the development and asked for more time to reply. She said her Permanent Secretary Mr Ladislaus Komba was handling negotiations with the Embassy over the matter and would be better placed to answer any queries. The PS was not available yesterday.
The development interestingly follows reports that Norway has dumped an auditor who revealed the massive embezzlement the MNRT funds.
Anti-Corruption and development Aid watchdogs in the Norway are using the case to query whether the Nordic country was committed to helping fight corruption in countries receiving its aid
The reported sidelining of Mr Arthur Andreasen who exposed the $30 million loss in corrupt practices has also put the Embassy in Dar es Salaam on the negative spotlight.
But Mr Jorgense denied the accusation and defended both the Embassy and his government of any wrongdoing. He insisted Mr Andreasen had not been sidelined. J�rgensen, said a Tanzanian firm, Baker Tilly DGP &CO, that partnered with the Danish professional to carry out the now controversial MNRT audit has been retained to carry out an the evaluation exercise after the ministry queried the huge sum in embezzled donor money.
"The embassy has not sidelined Mr Andreassen or his firm ND Revision. ND revisions former associate Baker Tilly DGP &CO is still being used by the Embassy for a number of tasks. This means we have continued the work with the Auditors who helped us in the first place with the audit of MNRP," said J�rgensen. He said: "Baker Tilly DGP & CO has not undertaken a new audit of MNRT.
They were asked to take part in a joint working group of the Ministry and the Embassy to verify figures for the process of negotiating a refund from the MNRT to the Embassy based on the findings of the previous audit." Mr J�rgensen declined to reveal how much in refunds his government was claiming because the two governments were still in negotiations over the exact amount of missing funds.
"The Embassy is still claiming a refund of all funds where it is documented that they are not used in accordance with the contract. This is being negotiated between the two governments. We cannot disclose figures since the negotiations are still going on," said J�rgensen.
He said Norway remained a leading country to promote good governance and anti-corruption in development cooperation. "Media focus reinforces the fight against corruption," he said. Mr Andreasen's findings that were made public early this year followed an official audit of the Management of Natural Resources Programme (MNRP) under the ministry in 2007. The programme has been running since 1994 and received millions of dollars in assistance over the years.
The extensive exercise was sanctioned by the Embassy and the Danish auditor's firm, ND Revision, picked to head the task. However, the subsequent corruption revelations in the media have apparently rubbed some of the Norwegian authorities the wrong way. Reports in Oslo last week revealed that Mr Andreasen has since been left out in the evaluation exercise of the same audit currently underway.
Norway, one of Tanzania's largest bilateral aid donors is claiming a refund of all the monies embezzled under the MNRP programme to pacify tax payers back home who are questioning its commitment to fight corruption in aid. But a Norwegian publication, Development Today, quoted Mr Andreasen last week as expressing surprise that the Dar es Salaam office had not seen it fit to involve him in the evaluation exercise.
The popular subscription based journal that specializes in development assistance, business and the environment, also reported that Norway has reduced its refund claims to a fraction of the original estimate of USD 30 million in misused aid. No figure was given. When the corruption reports broke out, the minister for Natural Resources and Tourism Ms. Shamsa Mwangunga refuted the audit figures and was recently quoted in the media saying only some Sh2.4 billion could not be accounted for. The minister said it had also been established that another Sh1.2 billion had suspiciously been paid as VAT payments on vehicles against established regulations.
From other sources, however, Development Today reported that at a meeting in Norway recently, Ambassador to Tanzania Jon Lom�y indicated that the claimed amount now was down to $3.3 million (Sh4.4 billion). It was said that missing vouchers in bad condition were recovered in a container from the backyard of the Ministry.
In response, Mr Andreasen said: "As long as I don't have the possibility to see any new documentation, I stand by my findings. Our findings were real. I don't know what they have done after our investigation. I am totally confused that the amount could be reduced by so much,"he says. Ms. Mwangunga has vowed that the government would investigate the matter fully and punish any officials implicated in the embezzlement. No official communication has however been issued since April.
But the reports in Oslo suggested Norwegian and Tanzanian authorities were keen to keep under wraps any negative publicity of the audit that has dented the former's claim of MNRP project as "the jewel in the crown" of Norwegian aid in this field.
According to Development Today, the ditched auditor has revealed that he was scorned at by an official from the Norwegian Ministry of Foreign Affairs who called and criticised him for speaking to the press about the report. Mr Andreasen who denies the claim said that he also faced similar criticism in meetings with the Embassy in Dar es Salaam.
He said he has since terminated his relation with the Tanzanian auditing firm because of the move to lock him out of the assignment. Mr Andreasen suggested Norway broke the European Union requirement that demands at least ten years of experience for an auditor carrying out such a job. He claimed his former partner has barely two years of experience for the contract awarded by the Embassy.
In Dar es Salaam however, officials defended their decision to retain Andreasen's former associate, with Mr J�rgensen telling The Citizen that Baker Tilley DGP & CO has also separately won a 3 year assignment on financial advise to the Embassy. The MNRP projects were in the forestry, fisheries, and wildlife sectors whose officials have often been implicated in pervasive corruption to enrich a close knit cycle of civil servants and political operatives at the expense of sustaining the important national resources. The huge loss was detected in only five out of the 11 projects under the programme. The highlight of the audit showed that aid had been used to pay for overpriced cars, consultant payments made with no reference to contracts or reports and large expenses for travel costs without documentation.
It also discovered that huge amounts of VAT had not been refunded while the Norwegian funds had also paid for 66 vehicles at a price that was deemed to be $1.5 million too expensive. Large amounts had also been transferred to the Ministry's general account without any documentation.
The problems in the MNRP project have also been documented by a former Embassy official Eirik Jansen who worked as a Task Manager from 2003 to 2007. It was Jansen who published the article: "Does aid work?" with the U4 Anti Corruption Resource Centre in Norway, outlining his experiences with the MNRP case in Tanzanian. Research Director Odd-Helge Fjeldstad at Chr Michelsens Institute (CMI) that hosts the Anti Corruption Resource Centre says it would be worrying if the Embassy in Dar es Salaam does not give out information about how it has reached a new figure for what amount should be refunded.
"It is in the Embassy's own interest to provide that information to avoid speculations that something irregular has happened,"he says.


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