The Citizen (Dar es Salaam)
Tom Mosoba
31 July 2009
Dodoma — The Bank of Tanzania (BoT) made a loss of Sh91 billion during the 2007/2008 financial year, Parliament heard in Dodoma yesterday.
The leader of the official opposition, Mr Hamad Rashid Mohammed, who revealed the loss, said this was contained in the bank's yearly financial report for the fiscal year under review that has just been tabled in the House.
He said the loss was questionable because BoT posted a profit of Sh96 billion during the 2006/07 financial year.
According to Mr Mohammed, whose shadow finance ministry report was read out by Ms Fatmah Fereji, the BoT loss was attributed to the drain in the foreign exchange account.
The loss in the foreign exchange account had reached Sh100 billion by June 2008, he said, while demanding the Government to explain why.
According to Parliamentary regulations, the BoT's yearly financial statement was first to be discussed in camera by the Public Organisations Accounts Committee (POAC), but Mr Mohammed said the loss was of greater public interest to be left to the oversight committee alone.
He was reading the opposition's statement on the budget of the Ministry of Finance tabled by minister, Mr Mustafa Mkulo, who requested for approval of over Sh2.6 trillion in allocations for agencies under the ministry, with Sh1.5 trillion going to service the national debt.
Mr Mohammed also questioned a Sh65 billion Government guarantee in "special EPA stock," saying the move contradicted both the Government's and BoT stated stance that transactions through the EPA account had been suspended, in the wake of the scandal in which phoney companies received Sh133 billion in illegal payments.
"The opposition camp is worried that this new EPA payments are being made at a time when the country is headed for general election next year. Because the country has no law to regulate political party financing and since the Auditor and Controller General does not hold parties to account, this special EPA stock is suspicious," he said.
The opposition also appealed to the CAG audit companies lining up for the Sh270 billion state guarantees over the global economic crisis, to avoid situations where suspect firms could access the funds for political expediency.
He also said the cost of the national ID card project at over Sh220 billion, was exorbitant even when compared to other foreign countries that have implemented similar projects.
The chairman of the Parliamentary Committee for Finance and Economy, Mr Abdalah Kogoda, said the ministry should present a concrete expenditure plan for the Sh1.7 trillion set aside to rescue sectors affected by the global economic crisis.
He warned BoT against deficit financing to cover internal loans by the Government, and instead, advised that such funds be channelled to infrastructure development.
In his budget highlights, Mr Mkulo said his ministry has completed drawing the National Social Protection Frame Work that aims to channel effort at uplifting the lives of those in poverty and disadvantaged groups.
The minister said BoT will this year strive to pull down inflation rate to 6 per cent. The rate recently jumped to two digits. He said the Tanzania Investment Bank will be given Sh26 billion to raise capital for entrepreneurs, while capital for agricultural finance window will be raised from Sh3 billion last year, to Sh20 billion this year.
He also said Tanzania Postal Bank and the community banks (Vicoba), would each get Sh1 billion to fund their programmes. Sh500 million has also been set aside for the Wananchi Empowerment Fund.
In order to boost trade at the Dar es Salaam Stock (DSE) market, the ministry would launch the enterprises growth market, with the aim of providing medium companies with capital to trade in share stocks. He said three new companies would be listed at the DSE to bring the total to 18 trading on the mart by June next year.
A new campus to recruit 10,000 students would be established in Msata, Bagamoyo District as an extension of the Institute of Finance Management (IFM).
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