Conference: Contain corruption to realise faster development

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George Mkuchika (L), has a word with Chief Justice Mohammed Chande Othman (C) and IPP Executive Chairman Dr Reginald Mengi during break at Fourth Pan African Anti-Corruption Conference in Dsm

Arresting corruption and capital flight will enable Tanzania to have more of the resources it needs to realise substantial reduction in poverty, a cabinet minister said yesterday.

Capt (rtd) George Mkuchika, Minister of State in the President’s Office overseeing the Good Governance portfolio, said that would be in line with the country’s objectives as outlined in the National Strategy for Growth and Reduction of Poverty (NSGRP).

Opening the Fourth Pan Africa Anticorruption Conference in Dar es Salaam, the minister said the money leaving Tanzania illegally every year is ten times the total foreign aid the country receives and therefore constitutes an drain on resources that would gone into development projects.

He gave the goals the country would have achieved if there wasn’t such capital flight as including reduction of maternal mortality rate from 454 per 100,000 live births in 2010 to 265 per 100,000 live births by 2025 as well as boosting access to power supply from 14 per cent of the population in 2010 to 18 per cent in 2025.

Mkuchika explained that corruption by individuals accounted for the smallest amount part of the flight of capital from Tanzania and other developing countries – only 3 to 5 per cent, adding: “The main actors are the multinational companies evading taxes. This explains why resource rich countries are poor and associated with what is commonly referred to as a resource curse.”

He said the conspiracy of factors such as corruption and lack of accountability is facilitated by the secrecy often surrounding the operations of tax havens and the fact that some companies do not observe laid down accounting standards and procedures.

The minister called for sterner measures at all levels of governance to arrest capital flight and tame corruption, saying: “Corruption undermines economic growth in individual countries and the African continent generally and jeopardises the consolidation of democracy, human rights and the rule of law.”

He said history shows that strong democratic institutions with transparent and accountable governance structures were powerful tools in the war on corruption and other systemic abuses of power.

“Academic research shows how corruption can disrupt the economy and society at large. It erodes trust in public institutions and political processes and undermines the functioning of markets,” he noted.

He added that corruption has a direct impact on national budgets and helps groups behind organised crime groups conduct their activities faster and more viciously.
Speaking on the sidelines of the conference, Prevention and Combating Corruption Bureau (PCCB) Director General Dr Edward Hosea said corruption was “a big issue not similar to normal offences”.

“Serious measures must be taken if the vice is to be tamed or arrested,” he noted, adding: “The World Bank says more than USD200 billion is lost each year through corruption and illicit capital flight.”

To make things worse, he said, “African Development Bank figures show that we have been losing about 50 per cent of our gross domestic product to corruption in terms of the revenue collected. If we were to collect all the revenue lost, there wouldn’t be much need for us to ask for much outside financial assistance.”

Without referring to any particular institution in Tanzania, Dr Hosea said time was ripe for the government to create stronger institutions to sweep the country clean of corruption and lack of accountability.

“This is because if we are to develop, if we are to eradicate poverty in the country, if we are to move from where we are and realise our development goals, then we need to consider corruption as an extremely serious matter,” he pointed out, adding: “Our institutions should be empowered to address the vices more appropriately and effectively.”

The PCCB chief said he would appreciate seeing corruption in fall in the category of Union matters under the envisaged Constitution for Tanzania, wondering why the Constitutional Review Commission headed by Judge (rtd) Joseph Warioba appears to have different ideas.

“The new constitution must deal with corruption and illicit capital flight squarely. We can’t afford to leave things as they are; something must be done. I will be amazed if the new constitution remains silent on the issue,” asserted Dr Hosea.

He told the journalists that unless the country responds to the matter urgently and appropriately, poverty will become endemic “because corruption is a killer and the nation must wake up and fearlessly combat it aware that it affects the nation’s entire fabric and not only politics or the economy”.

“Failure to do so will earn us understandable blame from posterity. So let us fight it, come what may,” he added.

John Jingu, director of Tanzanian civil society organisation Integrity Watch, meanwhile said corruption and capital flight was a problem in many developing and developed nations and seriously hampered efforts to eradicate poverty.

“We must join hands in this struggle as some of these tax havens we are talking about are disguised dens where corruption is rampant and deep-rooted,” he added.
The conference is organised by Germany’s Hanns Seidel Foundation in collaboration with PCCB and Integrity Watch.