6 June 2017

East Africa: Mystery of EAC Unofficial Bank Transactions Still Unresolved

Photo: The Citizen
East African Community headquarters in Arusha.

East African Community (EAC) Secretariat is once again on the spot over financial impropriety after it emerged that $38,000 was mysterious withdrawn from an account of one of its organs.

The money allocated to Zanzibar-based East African Kiswahili Commission (EAKC) was later deposited back to the account by a person or persons yet to be identified.

The incident, which occured more than a year ago, is yet to be resolved despite being reported to the police.

"It is not enough that the money has been returned. We have to find out how it was transferred and who was behind such an unauthorised transfer," said EAC chief legal adviser Anthony Kafumbe.

He said the alleged withdrawal of the money had baffled everybody at the Secretariat because the name of a person who purportedly took the money from the account was not recognised as an employee of the EAC.

KCB Zanzibar fingered

The matter emerged last week in a heated debate during the last session of the third East African Legislative Assembly (Eala). The lawmakers fingered KCB Zanzibar, where the account was held, for failing to cooperate in the investigations.

The Eala Accounts Committee, which was investigating the matter, tabled the report that noted that the $38,000 was withdrawn from KCB Zanzibar in two transactions within two days.

The first transaction took place on March 10, 2016 in which some $6,000 was dubiously cashed from EAKC's account, while $32,000 was allegedly withdrawn from the same account the following day - March 11th.

The money was taken under description "Chq Encashment CHQ000022 SHAMIRA R. MASIKA AT-TZZ" for the $6,000, while $32,000 was withdrawn under description "AT-LUMTZ4614 TRANSFER TPDC FT16071343H".

In the report, the lawmakers questioned why the KCB Zanzibar manager was unwilling to cooperate with the executive secretary of the Kiswahili Commission insisting to only deal with the EAC Secretariat.

"Although the money was later returned (to the account), the Commission should demand to know who brought it back, when it was brought back, who approved the transactions and for what activity," said Mr Jeremie Ngendakumana, the Eala Accounts Committee chairman.

Diverted calls

He told the Assembly that the committee also learnt that at the time of the alleged fraud, the mobile number belonging to the EAKC's executive secretary had been diverted "to some unknown number such that when the bank called the executive secretary for verification, an unknown person confirmed the transactions".

Mr Ngendakumana, a Burundian MP, said despite various correspondences with KCB Zanzibar, Bank of Tanzania, police and the EAC ministry in Tanzania, no substantial feedback on the mysterious transactions has been given.

But Dr Kafumbe rubbished claims that the Secretariat was sitting on the report and said the secretary-general, Mr Liberat Mfumukeko, has promised to pursue the matter to its conclusive end so that the culprits are punished.

Secretariat's call

An Eala official, who spoke on condition of anonymity, said the EAC Secretariat needs to act on the findings of the report and that those found culpable are punished "so that there is no repeat of such thing in future".

He said the case cannot be separated from all other allegations of misuse of funds at the Secretariat which has also been uncovered by the regional parliament.

The legislators insisted that the investigation be escalated to KCB Group headquarters in Nairobi "for proper explanation on the matter".

The third Eala was dissolved and a new Assembly has yet to start sittings as Kenya dithers on picking its representatives owing to a stalemate between the ruling Jubilee party and the Opposition.

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