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Tanzanian minister calls time on procurement corruption

July 9, 2013 Leave a comment

SupplyManagement

28 June 2013 | Adam Leach

The United Republic of Tanzania plans to review its procurement legislation to close loopholes that make it possible for corrupt officials to profit from the public purse.

Addressing parliament this week, minister of state Stephen Wassira, pledged to take action to ensure items could not be purchased at inflated prices under the law, which results in unreasonably high profit margins for suppliers. As well as helping to reduce corruption, he said the more robust rules would boost competitiveness among businesses looking to supply to government.

Announcing his intention, Wassira, said: “The time has come to review the law. You can hide under the law and steal according to the law. If we do not act now and [instead] let corruption thrive, everything we buy or make will be substandard. And if we continue like this we will erode development.”

Around 70 per cent of the country’s development budget will be channelled through public sector procurement. The minister used this to strengthen the case for ensuring regulations are tight and robust.

Call for African governments to collaborate on procurement reform

October 15, 2012 Leave a comment

Supply Management

15 October 2012 | Anna Reynolds

African governments should work together and pool procurement systems to develop more efficient and transparent public services.

This was the message given to delegates attending the Commonwealth Public Procurement Network (CPPN) conference in Tanzania last week, which examined the reforms taking place in public financial and procurement systems across African Commonwealth countries.

The CPPN was set up by the Commonwealth Secretariat in 2006 to provide a platform for policy makers and regulators to recommend changes to governments to ensure best value delivery of public services.

Marcel Holder Robinson, acting adviser of public expenditure management at the Commonwealth Secretariat, told SM: “Governments can no longer view procurement as an administrative function, but rather a strategic and political one.”

The conference looked at member countries that have implemented new procurement structures, such as in Tanzania where a procurement complaints body and a board of purchasing and supply professionals have been set up under the control of the public procurement policy division in the Ministry of Finance.

The CPPN also identified the constraints and benefits of countries shifting from a largely legal-based procurement system to a more up-to date public procurement system involving performance management and accountability structures, which has taken place in Ghana.

“While embracing the values of a sound procurement system, there was consensus among the delegates on the merits of emerging trends such as a sustainable approach to procurement, e-procurement and collaborative procurement to achieve greater value for targeted segments as well as for society at large,” said Anund Mudhoo, chair of the CPPN.

A review was carried out into what steps are being taken to address green and socially responsible procurement. A panel asked whether countries are becoming a dumping ground for poor quality products and if enough is being done to prevent corruption and abuse of employment and health and safety laws.

Additional areas of discussion were women’s participation in public contracting in South Africa and using IT for improved purchasing processes.

One outcome of the conference has been the development of an online community, which has been built by the Commonwealth Secretariat enabling countries to share information and advice.

The conference also encouraged the benefits of pooled procurement systems in sub-regions. It advised collaboration on areas such as price negotiation, quality assurance and supplier prequalification.

The CPPN called for more current data on member countries’ reforms and has begun working on an initiative to address this matter.

The network is also working to establish relationships with organisations that hold similar interests and collaborate to design programmes to help countries implementing procurement reforms.

The conference was attended by more than 140 senior procurement officials from over 20 commonwealth countries, including Botswana, Cameroon, Ghana, Lesotho, Malawi, Mauritius, Namibia, Nigeria, Rwanda, Seychelles, South Africa, Sierra Leone, Sri Lanka, St Lucia, Swaziland, Tanzania, The Gambia, Uganda and Zambia, as well as representatives from CIPS Africa, the African Capacity Building Foundation and the Centre for the Development of Enterprise.

Tanzania: Minister tells procurement network to fight bureaucracy

October 14, 2012 1 comment

October 6th, 2012

By Felix Lazaro, The Citizen Reporter

Dar es Salaam. Deputy Finance minister Saada Mkuya Salum has called for formulation of more initiatives that will address problems of bureaucracy and secrecy that mar the country’s public procurement practices.

Speaking on Wednesday during the Commonwealth Public Procurement Network 2012 African Regional Conference in Dar es Salaam, she said despite various procurement reforms undertaken, the desired results were yet to be fully achieved.

“Our countries have procurement legislations and bodies to oversee their implementation. Despite these impressive structures and reforms we all complain about bureaucracy and secrecy surrounding these procurement systems,” said Ms Salum.

Lack of transparency in procurement, she said, needed to be addressed to improve efficiency and diligence, particularly in realizing value for money, quality and timely delivery.

She expressed her optimism that the meeting would act as a catalyst to the country’s procurement regime as well as those of other African countries and the deliberations bring forth procurement experiences and best practices.

Ms Salum said if the right inputs and appropriate processes of procurement were put in place, the chance of getting good outputs were high.

“Our people want to see good services in the health sector, education, water and others, while they all happened within the budget,” she said.

For his part, retired Justice Thomas Mihayo said after Tanzania had operationalised the Public Procurement Act, 2004 for sometimes, it has become clear that it was not just the matter of compliance but the need to go beyond that and see if the Act delivers the intended goals.

“Are we really getting value for the money spent? Are the social and environmental concerns addressed when making procurement decisions?” quarried Justice Mihayo whos is the Acting chairman of the Public Procurement Regulatory Authority’s board of directors.

Justice Mihayo said the meeting should be the catalyst for the country to achieve necessary reforms in its public procurement system for it to deliver effective and sustainable outcomes.

U.S. Company Linked to Refugee Abuses In Tanzania

July 11, 2012 Leave a comment

CorpWatch

By  Pratap Chatterjee

July 10th, 2012

AgriSol, an Iowa company, has been linked to plans to evict 160,000 Burundian refugees from Katumba and Mishamo in western Tanzania, according to “Lives on Hold,” a new report by the Oakland Institute.

Kilimo Kwanza which translates as “Agriculture First” is a recent Tanzanian government initiative to promote a “greener revolution” through agricultural modernization and commercialization via public-private partnerships. The program was launched in August 2009 by Tanzania’s President Jakaya Kikwete.

Enter Agrisol Energy LLC’s – an Iowa-based investment company that specializes in agribusiness. The company’s goal is to find “underdeveloped global locations that have attractive natural resources but lack best-in-class agricultural technology, farming techniques, equipment and management.” The company opened talks with the government to start large-scale crop cultivation, beef and poultry production, and biofuel production in three “abandoned refugee camps” – Lugufu in Kigoma province (25,000 hectares) and Katumba (80,317 hectares) and Mishamo (219,800 hectares), according to company business plans.

2011 investigation by the Oakland Institute,  a California based NGO, revealed that the refugee camps were not abandoned but very much occupied by Burundian refugees who have lived in the area for 40 years.

Agrisol does not deny this. Henry Akona, AgriSol Tanzania’s director of communications, says that the company officials were initially told that plans had been made to move the refugees from the settlements. “We were considering those areas a few years ago, but we have suspended any plans because the land is occupied,” Akona told the Daily Iowan. “We should have done better homework.”

Oakland Institute profiled Sembuli Masasa, the father of seven children, who had been farming in Katumba for 39 years who told researchers: “They are giving us $200, ask us to dismantle our own house and to move to a place we have never seen before.”

“Initially promised citizenship, the residents still await their papers, conditional on them vacating their homes and lands in order to make way for the foreign investor,” says Anuradha Mittal, executive director of the Oakland Institute. “The residents have been banned from cultivating crops including perennial crops such as cassava or building new homes and businesses, leaving them with no other option but to consider moving.”

The new report alleges human rights abuses of the refugees “which range from the burning down of houses and crops and violation of their freedom of speech to inequities in social services.”

Akona disputes charges that the company is responsible for the fate of the Burundians. “AgriSol has absolutely nothing to do with the refugees in Katumba and Mishamo,” he told the Daily Iowan.

The Oakland Institute report has created a storm in Iowa, notably for Bruce Rastetter, CEO of AgriSol Energy who worked with Iowa State University‘s College of Agriculture and Life Sciences in Ames, Iowa, to get support for the deal.

Faced with growing questions, the university pulled out in February 2012

Iowa Citizens for Community Improvement, a community group in Des Moines, Iowa, has filed an official conflict of interest complaint against Rastetter with the Iowa Ethics and Campaign Disclosure Board, and are lobbying for Bruce Rastetter to be removed as Iowa Board of Regents President Pro Tem.

The Tanzania project is part of a new phenomenon that activists are calling “land grabbing.” GRAIN, a global agricultural think tank based in Barcelona, estimates that at least 50 million hectares of good agricultural land – enough to feed 5 million families in India – have been transferred from farmers to corporations in the last few years alone.

Economists say that governments have to be very careful about inviting corporations to manage vast swathes of land in poor countries. “If it’s done properly, and if African governments take care of their countries and their populations, this can be a big benefit,” says Jeffrey Sachs of Columbia University told Dan Rather reports. “If they in effect give away these valuable resources, then what happens is these scarce resources benefit some other part of the world. And Africa is left even worse off than it was before.”

Tanzania leader sacks ministers amid corruption scandal

May 7, 2012 1 comment

BBC

May 4th, 2012

He has been under pressure to deal with the scandal following a report by a body overseeing public finances.

The inspector of the government‘s accounts noted the rampant misuse of funds in at least seven ministries.

The ministers who have been dropped from cabinet all hold high-profile portfolios: Finance, energy, tourism, trade, transport and health.

‘Taken to task’

In November, the ruling CCM party promised to implement anti-corruption measures, but there have been heated calls from the opposition for heads to roll.

Announcing the cabinet reshuffle, President Kikwete said that accountability would be taken seriously and ministers’ subordinates and even executives working for state-owned companies would also be held responsible over any embezzlement.

“It is not enough for a minister to take responsibility alone but the new approach is that even those who caused the mishap will be taken to task as well,” Mr Kikwete told journalists at State House in Dar es Salaam.

The BBC’s Hassan Mhelela in Dar es Salaam says the ministry of energy, which oversees the lucrative mining sector, and ministry of tourism – two of the major revenue generators for the government, were criticised most in the Controller and Auditor General’s annual report.

There have been mixed reactions to the sackings, our reporter says.

Many are pleased that the government has acted at last but some feel there should be prosecutions too, he says.

Mr Kikwete was re-elected in 2010 for a final five-year term.

His government has struggled to tackle corruption which has adversely hampered economic growth in Tanzania where the rate of inflation rate stands at 19%.

Last year, donor countries cut funding pledges to Tanzania after expressing concern about corruption and the slow pace of reforms.

Inquiry urges independent body to purchase oil stocks

April 21, 2012 1 comment

Zambia Post

By Kombe Chimpinde

April 21, 2012

THE commission of inquiry into the procurement of oil has recommended that an autonomous institution be given the mandate of purchasing the country’s crude oil stocks.

This proposal outlined in its key recommendations, is in view of irregularities and corrupt practices in the procurement of oil established by the commission during its public sittings.

A source has revealed that the Wynter Kabimba-led commission recommended that the government considers coming up with another body with competence and capacity to be responsible for the effective procurement of petroleum products for the country.

The commission recommended that government consider as soon as possible the commission of a feasibility study to determine the most feasible model for the government to the private sector as the case in Tanzania and South Africa,” the source said.

The source revealed that the commission also recommended for forensic audit of the Ministry of Energy on contracts for procurement of commingled petroleum stock awarded between 2007 and 2011.

“Other recommendations were for a forensic audit to be conducted at the Ministry of Energy on the construction and rehabilitation contracts of fuel storage tanks at Ndola Fuel Terminal and selected provincial depots to establish the actual cost of this infrastructure,” the source said.

“The commission has stated that government should also consider changing the tax regime and fees on petroleum products from ad valorem (percentage based) to fixed or absolute amounts in order to bring revenue predictability and reduce tax burden on the final consumer in the light of fluctuating international oil prices.”

The commission also recommended for the reviewing of the mandate of the Energy Regulation Board (ERB) whose operations were also scrutinised by the commission of inquiry.

The inquiry report has revealed corrupt practices in the procurement of oil between 2007 and 2011 where former president Rupiah Banda and his son, James, and some former senior government officials have been recommended for investigation over the K2 trillion oil procurement loss.

Sources revealed that the commission had recommended to law enforcement agencies to investigate Banda, James and other named public officers at the then Ministry of Energy and Water Development and Zambia Public Procurement Agency (ZPPA) in relation to various listed procurements contracts.

Also cited in the report are former energy minister Kenneth Konga, former permanent secretaries in the same ministry, Peter Mumba, Teddy Kasonso, Buleti Nsemukila and former information minister Lt Gen Ronnie Shikapwasha.

ZPPA former directors Samuel Chibuye and David Kapitolo, secretary in the Central Tendering Committee (CTC) at ZPPA Justine Matimuna and director in the Ministry of Energy, Oscar Kulumiana, among others.

Tanzania plans a railway line to reach South Sudan

February 24, 2012 1 comment

The East Africa

By Leonard Magomba

February 18, 2012

Tanzania, Uganda, Burundi and Rwanda have reached a formal agreement to construct a multi-billion dollar railway network, which would also serve South Sudan and tap into the bloc’s growing trade.

The project, to commence in 2014, is expected to take three years and cost $4.7 billion.

This will run alonsgside the $3 billion Tanga-Arusha-Musoma-Kampala railway line that is expected to be completed by 2015.

Tanzania and Uganda signed an agreement with China Civil Engineering Construction Corporation to undertake a feasibility study and implementation of the project, which will be the main gateway of Mwambani Port in Tanga, Musoma dock and Port Bell in Uganda.

“We are expecting to handover the feasibility study by April while construction of the 880km railway line is expected to be completed by 2015.” the Chinese engineering firm managing director Wang Xiangdong said,

Mr Xiangdong said the railway line will be constructed to the 1,435mm, which is the standard gauge used in other countries and directed by both states.

The project will see Tanga and Musoma ports dedicated to handle cargo, traffic destined to Uganda and South Sudan. Beyond that the project will help to ease congestion at Tanzania’s principal’s port, Dar es Salaam.

Freight would be conveyed from Musoma by ferry to the Port Bell pier — about 350km of transportation in the lake. A rail connection already runs via Tororo to Gulu – nearly 600km – on the Pakwach branch.

A new line of roughly 250km would be constructed to Juba, and a further 550km to the Wao railhead in South Sudan.

Tanzania: Ewura CCC Urges Bunge to Probe Extractive Industry

February 13, 2012 Leave a comment

AllAfrica.com

BY FINNIGAN WA SIMBEYE

February 9, 2012

THE parliament should continue pressing for access by its members to all contracts signed between the government and private investors in the extraction of natural resources to get rid of the problems that shroud the mining sector in the country.

According to the Chairman of Energy and Water Utilities Regulatory Authority Consumer Consultative Council (EWURA-CCC), Professor Jamindu Katima, most of the problems with contracts signed between the government and private firms in the extractive industry emanate from secrecy.

These contracts are top secret which not even parliament can access easily,” said Prof Katima who is also the Principal of College of Engineering and Technology of University of Dar es Salaam.

He said all contracts in the gas subsector need to be reviewed if proved to be faulty as was the case with Pan African Energy which faces accusations of evading taxes in the tunes of billions of shillings while inflating prices of gas supplied to Tanzania Electric Supply Company (TANESCO).

Apart from Songas and Pan African Energy, others companies extracting and supplying natural gas include Canadian Wentworth Resources and French Morel & Prom which are operating at Mnazi Bay in Mtwara region.

Lawmakers should continue to press the executive so that they can access all contracts and where necessary review them,” the Nobel Laureate said. Prof Katima who is a 2009 joint Nobel Laureate argued that Songas Limited may have signed another bad contract with Tanzania Petroleum Development Corporation which needs to be reviewed as its power tariffs to Tanesco are also excessive.

The don however warned against any attempt to undo such contracts. “I do not support severing such contracts because experience has shown that it becomes twice a burden to the public,” he pointed out naming Dowans Holdings Limited as the latest example…Read more.

Zambia: Inefficiency, expensive financing leads to high fuel cost

November 5, 2011 1 comment

Times of Zambia

By Davies M.M Chanda,

October 31, 2011

THE Wynter Kabimba commission of inquiry on the Energy Regulation Board (ERB) has heard that Zambia has the highest cost of fuel in the mainland Southern African Development Community (SADC) regional bloc because of procurement inefficiency and an expensive financing arrangement.

The Zambia Association of Manufacturers (ZAM), in its written submission before the commission has proposed that Government should rationalise the tax regime for both crude and finished products by lowering them.

According to a written submission presented to the commission by the Zambia Association of Manufacturers vice-president Steve Mwansa, the price of diesel in 2008 for Botswana was US1.19, Malawi US$0.96, Mozambique US$1.05, Namibia US$1.04, South Africa 1.04, Swaziland US$0.99, Tanzania US$1.05 while the cost in Zambia was about US$1.48.

The submission made available to the Times yesterday state that Government should also issue permits to oil marketing companies to supply areas according to their geographical location such as Nacala development corridor supplying Eastern Province while addressing alternative routes such as Angola and Mozambique.

Mr Mwansa said with good practices as recommended by ZAM, the country’s cost of fuel could reduce and estimated 19 per cent for petrol while diesel price would drop by 17 per cent and that Kerosene would sale at 21 per cent less than the current price.

ZAM cited poor feedstock cargo formulation, lack of adequate national reserves, inefficient feedstock processing and underdeveloped infrastructure for the importation of the finished products. The association also stated that the taxation system was the highest within the mainland SADC member states and that Government levies, duties and other taxes were higher in Zambia compared to other countries. ZAM has since called for a more transparent procurement system for crude oil and comingled petroleum which should also reduce supply chain costs.

There was also a call for balancing the reduction in tax on fuel with the increased collections from other sectors such as mining. The tax in Botswana, Malawi, Mozambique, Namibia, South Africa, Swaziland and Tanzania ranges from 0.06 to 0.44 per cent while in Zambia, it stands at 0.55 per cent. The commission was constituted by President Michael Sata last month to establish what was causing the cost of fuel to remain higher than the rest of the region and establish bottlenecks in the procurement system.

Mr Mwansa said there was need to invest in preventive maintenance for the Tanzania-Zambia oil pipeline to reduce on the losses and that ERB percentage fees should be reduced. The commission is expected to hold its sittings today at the Mulungushi International Conference in Lusaka before moving to Ndola on the Copperbelt Province where sittings will take place at the council chambers.

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