The scandal that saw the resignation of then Prime Minister Edward Lowassa, the Minister of Minerals and Energy, and the Minister for East African Cooperation continued to unfold in 2009 with the owner of the American Richmond Development Company taken to court in January on 5 counts of forgery and giving false information to TANESCO. The contract awarded to this briefcase company in 2006 is said to have caused Tanzania a loss of Sh 172.9 billion.

With a cost of Sh 9 million per house, the money lost by the Richmond scandal could have built 19,211 houses for primary school teachers. Teacher housing is one of the leading problems currently in the education sector. They simply do not exist at many schools and are causing teachers, without their basic needs being met, to abandon the profession to search for work elsewhere. The Ministry of Education put less than Sh 5 billion toward constructing teacher houses in 2008/2009 when the Primary Education Development Program (PEDP) II called for Sh 153 billion to be spent on teacher housing! While the Government only met 3% of what PEDP II directed to be spent on teacher housing, the money lost in the Richmond case would have been more than enough to meet the PEDP II target.

The media is one of the most important tools in a democratic society. Newspapers, television, radio, and the internet keep people informed on the latest events happening in their cities, countries, and world. It is through this information that citizens become knowledgeable, active respondents to the world around them.

Here at HakiElimu, we see the value of media and have taken it upon ourselves to offer a ‘Media: Year in Review’. As has been the case in years past, this year, 2009, was again rife with scandals of corruption. Often these cases involve mindboggling amounts of money that are so high that they actually begin to lose meaning. How much is Sh 100 billion? Sh 200 billion? These amounts are so far beyond our own incomes or monetary use that we really don’t even know what they mean.

Well, we do now. We’ve taken the corruption cases that have dominated the headlines in 2009 and have looked at what that money could have done for the education sector if it had not gone into the pockets of corrupt senior officials. This is not to say that if this money had not been stolen it would have gone to improve the education system: these are only examples of what the money equates to in educational terms. Also keep in mind that many of these cases are being processed in court, and the accused are innocent until proven guilty.

Richmond = 19,211 Teacher HousesRichmond = 19,211 Teacher Houses

How Corruption Kills our Children’s Education:How Corruption Kills our Children’s Education:

Media Year in Review 2009Media Year in Review 2009

HakiE

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The ongoing corruption saga that began in 2002 with the Sh 70 billion purchase of an outdated, unusable radar from Britain’s BAE Systems has a whole list of people under investigation including British bank officials and Tanzania’s former Minister for Infrastructure Development and Attorney General, Andrew Chenge, who is accused of pocketing almost Sh 2 billion into his own personal UK bank account. The Prevention and Combating of Corruption Bureau (PCCB) continued its investigation in 2009 and is finalizing its case for full prosecution of those involved in the radar scandal.

Instead of buying inoperable technological equipment or going into the pockets of corrupt officials, these public funds could have gone to really increasing Tanzania’s scientific capacity—the Sh 70 billion could have built 2,412 science labs for our secondary students. The Parliamentary Committee on Community Development announced that there’s a shortage of 2,412 laboratories in our secondary schools. In 2008/2009, the Government spent Sh 7.38 billion to build 187 labs at A-level schools, which gives a cost of Sh 39.5 million per lab. However, the Secondary Education Development Plan (SEDP) outlines the cost of a lab to be Sh 14 million. If the real average cost to build a lab is somewhere between these two, say Sh 29 million, then this Sh 70 billion would have been enough to build all 2,412 laboratories that our secondary schools need.

Richmond = 19,211 Teacher HousesRichmond = 19,211 Teacher Houses

BAE Radar = 2,412 LaboratoriesBAE Radar = 2,412 Laboratories

In another ongoing investigation, former Minister for Finance, Basil Mramba, former Minister for Energy and Minerals, Daniel Yona, and former Permanent Secretary at the Treasury, Gray Mgonja, have been taken to court for their involvement in wrongfully granting tax exemptions to the UK gold auditing company Alex Stewart (Assayers) Government Business Corporation, causing a Sh 11.7 billion loss to the Government of Tanzania.

While this may prove to be a case of being innocently incompetent with pricey consequences, it is known that the mining sector is one of the most corrupt. Corruption is a two-way street: there are bribe-takers and bribe-givers, and one can’t exist without the other. The mining sector does a lot of business with relatively wealthy foreign companies which, driven by profit -maximization, illegally pay off our officials, who are also driven by personal profit -maximization. Why pay huge sums in tax to Tanzania when you can just pay off a handful of officials to get a tax exemption? It is reported that Tanzania loses Sh 70 billion per year from dubious contracts government officials make with foreign mining companies.

Instead of having foreign companies excavate our mineral wealth while they dig their way out of our tax system, this Sh 70 billion could have dug 7,777 latrines. With a cost of Sh 9 million per latrine, this money could have nearly met half of the PEDP II target for latrine construction in 2009 of 17,864.

Mining = 7,777 LatrinesMining = 7,777 Latrines

The controversial BAE Radar

Students learning in a secondary school laboratory

BoT Twin Towers = 31,571 ClassroomsBoT Twin Towers = 31,571 Classrooms

2009: Another Troublesome Year with the Bank of Tanzania2009: Another Troublesome Year with the Bank of Tanzania

The former Director of Personnel and Administration at the Bank of Tanzania (BoT), Amatus Liyumba, has made media appearances throughout 2009 as his trial is under way in which he is charged with abuse of office, disobedience, and occasioning losses to the Government amounting to over Sh 221 billion. From 2001 to 2006, Liyumba made radical changes and unauthorized decisions concerning the construction of the BoT Twin Towers. While the original building plan approved by the BoT Board of Directors was for Sh 105 billion, the construction of the Twin Towers shot up to Sh 221 billion by the time Liyumba and the late Daudi Balali, former BoT Governor were done with their magnificent modifications.

Sh 221 billion is an unthinkable amount of money. If it were to have gone to constructing learning environments for our nation’s children instead of luxurious offices for BoT’s elite, it could have built 31,571 classrooms. PEDP states the need for new classrooms as being 10,753 per year, while the inflation -adjusted cost of classroom construction is Sh 7 million. Sh 221 billion is about the amount that is called for by PEDP for classroom construction…for 3 years!

Meanwhile, 4 other top BoT officials were recently released from prison on bail who were arrested and are awaiting trial for corruption and economic sabotage—they are being charged with ripping off the Government by charging it inflated prices for printing new money, a scam that created a Sh 104 billion.

While it’s able to overpay the BoT to print new money, the Government can’t seem to get its hands on a far smaller amount of money to pay what it owes our educators. Verified this year by the Controller and Auditor General (CAG), the Government owes our teachers Sh 22.8 billion for unpaid benefits and allowances. This apparently is difficult to find as there are reports from regions such as Tanga, Kagera, and Mbeya where teachers are piling up in District Councils demanding what is due and threatening strikes. Of course, if the Government was duped by the BoT out of Sh 104 billion while trying to procure more cash, it’s no wonder that it doesn’t have any to repay teachers.

BoT Inflated Bank Notes = 5 Times Unpaid Teacher Claims BoT Inflated Bank Notes = 5 Times Unpaid Teacher Claims

The Bank of Tanzania Twin

Towers in Dar es Salaam

BoT Twin Towers = 31,571 ClassroomsBoT Twin Towers = 31,571 Classrooms Twin Towers + Bank Notes = Nationwide School Lunch ProgramTwin Towers + Bank Notes = Nationwide School Lunch Program

2009: Another Troublesome Year with the Bank of Tanzania2009: Another Troublesome Year with the Bank of Tanzania

Together, these two BoT scandals reach an unbelievable sum of Sh 325 billion. What could money like that really do? The World Food Programme estimates that lunch for a primary school student costs Sh 33,000 for a year. With 8,441,553 primary school students this year, that’d be Sh 279 billion for an entire nationwide school lunch program. Hmmm…money that was supposedly eaten by 6 BoT officials could have fed every single one of our primary school students for a whole year.

BoT Inflated Bank Notes = 5 Times Unpaid Teacher Claims BoT Inflated Bank Notes = 5 Times Unpaid Teacher Claims

A heap of trials of individuals and companies involved in the BoT’s External Payment Arrears (EPA) scam dominated the headlines in 2009. In the 2005/06 fiscal year, the Government lost Sh 133 billion through the EPA as the BoT made illegitimate payments to 22 illicitly registered or even unregistered local companies. Now, it is said that Sh 63 billion of this money has been recovered. Even so, the UK’s Department for International Development (DFID) has frozen Sh 24 billion in aid to Tanzania due to the serious budget framework problems demonstrated by the EPA scandal. This shows another level of the compounding nature of corruption—money is not only lost by corrupt officials pocketing it or preventing funds from entering the Government system as through invalid tax exemptions, but also donors begin to cut funding.

Not considering what could or could not be recovered, the grand total lost because of the EPA scam stands at Sh 157 billion. To give an idea of how huge a sum this is, the same amount of money could have trained enough new teachers not only to meet the desired national teacher-pupil ratio but to blast straight through it. Currently with 157,185 teachers for 8,441,553 students, we have a national teacher-pupil ratio of 1:54 while we’re striving for 1:40. With a cost outlined by PEDP II adjusted for inflation of Sh 917,000 to train one new teacher, Sh 157 billion could provide 171,210 new teachers. Together with existing teachers, that would cut the teacher-pupil ratio in half to 1:26!

A makeshift primary school classroom

EPA = 171,210 New TeachersEPA = 171,210 New Teachers

Tanzania Revenue Authority =Tanzania Revenue Authority =

Real Capitation GrantReal Capitation Grant

Five men—1 from TTCL, 2 from TRA, and 2 from NBC —have been arrested for running a scam from June 2008 to January 2009 in which they siphoned off Sh 5.9 billion from taxes being paid by TTCL that were meant to reach the TRA. So far, the PCCB has confiscated almost 20 luxury cars and 14 newly-built upscale homes in Dar and Mwanza linked to these 5 individuals. They are said to be part of a larger syndicate that has been electronically robbing TRA of tax payments from TTCL and TANESCO worth Sh 100 billion.

It is unclear how this money will be returned to TTCL or TRA, but now, perhaps even partly because of these losses, TTCL is seeking a Sh 195 billion bailout from the Government. Corruption has a snowball effect in which the stolen funds become unpayable debts which then require the entity to turn elsewhere to get help in carrying the burden.

While perhaps forcing TTCL to seek a Government bailout, this Sh 100 billion can be understood in terms of the original education Government bailout —the capitation grant. Initiated in 2002 with the launch of PEDP, the capitation grant was meant to reduce household costs so as to introduce universal primary education. Though for years the Ministry of Education

has been saying that the primary school capitation grant per student is 10 USD, which is defined as Sh 10,000 by PEDP II, it has never been close to providing a Sh 10,000 capitation grant. Last year, it released Sh 45.5 billion: with 8,410,094 students in 2008, that’s Sh 5,410 per student. This year, to supply a Sh 10,000 capitation grant, the Ministry needs to release Sh 84.4 billion though it has already declared it only plans to provide Sh 80 billion. Sh 100 billion is not only enough to truly supply a Sh 10,000 capitation grant, but it would provide to every primary school student Sh 11,900, a figure closer to the real value of 10 USD today.

Refurnishing Dar es Salaam Parliamentary Office = 36,667 DesksRefurnishing Dar es Salaam Parliamentary Office = 36,667 Desks

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More recently, the Parliamentary Public Accounts Committee (PAC) is currently looking into Sh 1.1 billion that the Dar es Salaam Parliament Office spent on renovations in 2007/08. Originally set with a budget of Sh 425 million, the expenditures jumped to Sh 1.1 billion, a discrepancy that was originally questioned by the CAG. On top of the initial Sh 425 million, Sh 388 million was used to purchase an electric generator, and Sh 365 million went towards office furniture. Suspicions are being raised as some of the renovation costs appear to have been inflated by as much as 77% while payments worth Sh 526 million have no supporting documents.

While the Dar Parliament Office is refurnishing itself, it’s no secret that many classrooms go without desks for students to sit. With the average cost of a desk given by PEDP II plus inflation is Sh 40,000, Sh 1.1 billion could have procured 36,667 desks. In other words, 183 schools could have each been provided with 200 new desks.

Corruption cases continue to dominate the 2009 media headlines, and people debate on whether any real progress is being made. As of June, Parliament has now empowered the CAG to conduct routine audits of the BoT. Meanwhile, the PCCB has continued its work in 2009 investigating 584 cases of corruption, taking 137 of them to court, and so far seeing 25 convictions and 40 acquittals. From 1995 to the present, the PCCB has recovered Sh 87 billion.

What is more clear is the role media plays in informing citizens and keeping them abreast of current issues. With a spotlight on corruption, we see how it has permeated our commercial, governmental, and private affairs. And with correlations to the education sector, we can begin to get a better idea as to the magnitude in which corruption truly hurts our country. Now, it is our job as citizens, with this understanding, to fully engage in the fight against corruption and improve the future of Tanzania.

The Dar es Salaam Parliament Office Primary school students lacking desks