The Public Accounts Committee has urged the Controller and Auditor General (CAG), Mr Ludovick Utouh, to probe the whereabouts of $300 million (about Sh480 billion) missing from the Treasury. That amount of money could build 375 kilometres of tarmac road. It is close to what was allocated to the ministry of Transport in the 2013/14 financial year (Sh491 billion).
In a letter dated January 27 and signed by PAC Chairman Zitto Kabwe, the committee claims that the sum allocated over a period of two financial years (2012/13 and 2013/14) has been spent but not accounted for. “The issue of unaccounted billions from the Treasury was raised in my consultations with some development partners,” Mr Kabwe writes. “They call it ‘discrepancy’ but it needs thorough audit by your office.”
The PAC chairman raised concerns about the possibility of a “syndicate of theft of public funds at the Treasury” and suggests that Mr Utouh meets the development partners to solicit help with the audit. But the CAG professes not to have received the letter. “I advise you to contact the Treasury if the issue is about a malpractice in that office,” Mr Utouh told The Citizen.
The Permanent secretary at the Treasury also denied knowledge of the matter. “I do not know anything about missing funds from the Treasury,” Mr Servacius Likwelile said.
It was not clear whether the $300 million unaccounted for was from local revenue sources or from donors, who injected Sh842 billion into general budget support in the 2012/13 financial year. The CAG’s audit reports have highlighted the mismanagement of public funds running into billions annually in ministries and local governments.
The PAC said it was concerned about obvious “discrepancies” in the use of budgetary resources at a time the government cannot fund its own budget. The government also has budget deficits. Tanzania’s total budget for 2013/2014 is Sh18.2 trillion.
According to the Bank of Tanzania’s economic report for the first four months of 2013/14, the government recorded an overall deficit of Sh846.9 billion and it had to finance the deficit by borrowing from both domestic and foreign sources.
The same government had collected revenue of Sh2.96 trillion, or 83.5 per cent of the target for the period between July and October, with tax revenue accounting for 94.7 per cent of total revenue.
Aid from donors received during the period amounted to Sh703.7 billion against Sh1.05 trillion projected for the period.
Experts expect the total budget deficit for 2013/14 financial year, after grants and low interest borrowing, to account for 5.2 per cent of the Gross Domestic Product.
In the letter, the PAC also expresses concern over the ballooning national debt and backs the CAG’s efforts to alert the government on the risk to the health of the economy posed by high public debt.
In the letter, the PAC chairman urges the CAG to carry out a special audit of the national debt that reached Sh48 trillion in October 2013. Mr Kabwe writes: “The government maintains that the debt is sustainable because it has not reached 50 per cent of the GDP ratio. Their argument is based on an erroneous calculation that uses the ratio of the external debt over the GDP. But if you use the ratio of the total debt (domestic and external) over the GDP, Tanzania’s public debt is not sustainable.”
The country plans to allocate Sh3.3 trillion to service the national debt this financial year. This amount is more than what it spends on both infrastructure and education per year.