Three years have passed since the Norwegian government first discovered that US$30 million of its funding to a Tanzanian government-run natural resources project went missing. However, the Tanzanian public is only now learning of the scandal. In this guest post, Peter Bofin, a member of the Tanzanian peer review team for the Global Integrity Report: 2008, discusses Tanzania’s emerging national debate over corruption and foreign aid.
For ten years, the Norwegian-funded Management of Natural Resources Programme, managed by Tanzania’s Ministry of Natural Resources and Tourism, was touted for its achievements. Not until an independent evaluation in 2006 (and a subsequent external audit), was it realized that up to half of the funds were misused – or ‘eaten’ as Tanzanians say colloquially.
The report is fascinating as it is a rare example of development officials’ table talk transferred (relatively unfiltered) into a formal report. The allegation that half the funds may have been “spent on seminars, workshops, per diem, and travel expenses” may not be a surprise to those familiar with development initiatives in Tanzania. The leaked external audit report indicated that 30 percent of expenditures that went towards capacity building had no documentation, and that perhaps 50 percent of total programme expenditures were poorly accounted for.
But surely someone was checking?
The project was audited on an annual basis by Tanzania’s Comptroller and Auditor General (CAG). These audits only raised minor issues. The Norwegian Embassy didn’t have the time or capacity to properly review these reports, so they out-sourced their oversight to PriceWaterhouseCoopers, who okayed the CAG’s reports. Not until an independent evaluation carried out in 2006 were problems flagged, when independent auditors were brought in from Denmark.
The CAG’s annual report is pored over closely by media and special interest groups – exactly the sort of accountability processes donors profess to encourage. Jansen’s reflections make one wonder if CAG reports conceal more than they reveal. As for the Norwegians, in an interview this time last year on the issue, aid minister Erik Solheim admitted (translated from Norwegian): “Norwegian aid organizations are no different than any others and neither have we understood the extent of the problems that corruption in aid in fact represent.”
As Tanzania’s aid donors shift their assistance to direct budget support of line ministries (and away from more specific programs such as MNRP), Jansen concludes his report on a cautionary note:
“It is the Tanzanian CAG that reviews the accounts for the various activities, programmes, and projects which are financed through budget support. The donors are not able to access the level of detail or review accounts the way Norway did in MNRP. Activities and projects, the accounts and finance management system will be even further removed from the development partners [read: aid donors] when aid is provided as budget support.”
And the missing millions?
For at least a year now, the Norwegian and Tanzanian governments have been negotiating over the return of misused funds and future support for the natural resources sector. The negotiations continue.
— Peter Bofin
See this recent Commons post, for more on the relationship between aid effectiveness and budget monitoring in development policies.