EPA funds ownership: It is government money, states ex-BoT governor
-Quite ludicrous to say its not
SEBASTIAN MRINDOKO
Dar es Salaam
FORMER Bank of Tanzania (BoT) governor Edwin Mtei has added his voice to the ongoing debate over who precisely owns the more than 133bn/- embezzled from the central banks external payment arrears (EPA) account, asserting that these funds unquestionably belong to the government.
Mtei, who was the BoTs first indigenous governor for eight years (1966-1974), told THISDAY in an exclusive interview that the government's apparent disowning of the EPA funds is in fact unjustifiable.
Having also served as finance minister in the first phase government of the late Mwalimu Nyerere (1977-79), he self-assuredly dismissed the controversial statement made in Parliament by the current Finance Minister Mustafa Mkulo, to the effect that the government has nothing to do with the stolen funds.
Since the EPA account was created by the government itself in its efforts to address a serious scarcity of foreign exchange at that time, there is no doubt whatsoever that the money belongs to the government and its (poor) citizens, Mtei said.
During his colourful public career, Mtei was also the last secretary general of the first East African Community (EAC) which collapsed in 1977, and with the advent of political pluralism to the country in the early 1990s, was the founder chairman of the opposition Chama cha Demokrasia na Maendeleo (CHADEMA).
He told THISDAY that the central bank�s EPA account was created by the government to help facilitate international transactions between local parastatals and businessmen and foreign suppliers.
According to Mtei, the acute shortage of forex in the country from the 1970s through to the early 1990s was chiefly occasioned by the Kagera war with Uganda, unfavourable developments in balance of payments, natural calamities such as droughts, and various other factors.
He noted that under the EPA system, local companies or individuals wishing to import products from abroad using forex were required to deposit, at the then state-owned National Bank of Commerce (NBC), an amount of Tanzanian shillings equivalent to the full amount of whatever foreign currency the importer needed.
By the time the EPA account system was terminated, there were still significant amounts of money owed to various overseas suppliers by the NBC and the government, with the BoT assuming responsibility for this debt. Therefore, it is quite ludicrous to now say that this money doesnt belong to the government,� stated Mtei.
He noted further that with the impending privatization and sale of NBC, and the government being quite aware that no investor would accept to buy the bank with such huge EPA debts hanging over it, it was hence consciously decided at official level to transfer the account to the BoT for administration.
According to Mtei, although some of the EPA debts were actually written off by foreign companies that did business with the government decades ago, the debts were apparently kept on record by dishonest officials at the BoT, and later fraudulently assigned to local companies to facilitate the eventual misappropriation of the funds.
The EPA funds are owned by the government, therefore in extension it is money that belongs to poor Tanzanians, said the ex-BoT supremo and finance minister.
Further warming up to the subject, he asserted that the placing of unfaithful individuals in positions of authority at sensitive financial institutions like the BoT is what led to the uncovering of massive embezzlement of funds from public coffers over the years, in the process ruining the countrys economy and plunging Tanzanians into deeper poverty.
According to Mtei, Tanzania needs leaders with unquestionable integrity particularly at the helm of key public institutions such as the central bank, being the custodian of the countrys economic and financial well-being.
The former governors sentiments echo scepticism already raised in various knowledgeable quarters over Mkulos assertion that the embezzled EPA funds do not belong to the government.
In his controversial statement to the ongoing parliamentary budget session in Dodoma, the incumbent finance minister said the EPA funds are not government property, but rather the property of various private companies, with the central bank being involved in the transactions only as an agent.
However, this has been roundly and hotly disputed by a number of public and independent financial experts and auditors interviewed as part of a subsequent and ongoing THISDAY survey - Mtei being the latest.
Even the EPA account special audit report for 2005/06, conducted by the international audit firm Ernst & Young, categorically describes the funds as being government property and, among other things, also calls for a proper criminal investigation into the matter.
It is understood that the six-month deadline given by President Jakaya Kikwete to a high-powered probe team into the EPA scandal, chaired by Attorney General Johnson Mwanyika, has since formally come to an end.