Former British High Commissioner to Tanzania
Mr Parham has raised the Silverdale Farm case at the highest levels and has been ignored
Corruption: Coping with murkier corners of capitalism
By Tom Burgis
Published: November 7 2007
At the newspaper stalls that line Samora Avenue, Dar es Salaam’s teeming thoroughfare, one story dominates the frontpages day after day.
Headlines scream of scams and vote-buying, the “stench” and “reek” of graft. Few opening paragraphs omit the word “shady”.
Tanzania’s breakneck transition from socialist command economy to a free market created a private sector before strong institutions were in place to police it. As those institutions emerge, the scale of their task becomes apparent.
“When you turn over a stone that’s been there for a long time, you expect to find a few nasty things,” says David Stanton, head of the UK’s Department for International Development in Tanzania. “That’s what happened here. Every day we are hearing more and more allegations of corruption.”
Stone-turner-in-chief, Edward Hoseah, director of the Prevention of Corruption Bureau (PCB), insists he is serious about his mission.
He needs to be. A recent report by the comptroller and auditor general found that TSh1.3bn ($1.1m) left government coffers in 2005-06 without proper documentation.
Mr Hoseah is under pressure to produce scalps, especially since a new anti-corruption law was enacted in July, strengthening his agency and creating 20 new corruption offences.
He says he intends to seek criminal charges in the near future relating to the 2002 sale of a £28m radar by the UK’s BAE Systems to the country. While his targets are Tanzanian agents rather than Europe’s biggest arms maker – which says it does not comment on active investigations but insists that is not an admission of wrongdoing – the probe has brought the PCB into contact with the UK’s Serious Fraud Office (SFO).
The SFO says it is doing its utmost to help the PCB build its capacity. In addition to training Mr Hoseah’s agents in London, the SFO has furnished the bureau with eight laptop computers.
By all accounts, that is a significant increase in resources, testimony to the strain that running a nationwide operation with 1,500 staff places on a tight budget. Foreign donors are also seeking to bolster the bureau.
SFO investigators and diplomats speak highly of Mr Hoseah, but local critics accuse him of getting cold feet when it comes to going after top people. He counters: “Whether [the offenders] are a shark or small fish, they will be dealt with according to the law. Even within the ruling party there are no islands for corruption.”
Mr Hoseah’s highest-profile targets to date have been members of Chama Cha Mapinduzi (CCM), the party that has dominated politics since independence in 1962. One foreign official compares CCM to the Partido Revolucionario Institucional, which created a party-state in Mexico before being consumed by its own corruption after 70 years in power. But Mr Hoseah says he is reluctant to pursue former leaders, citing comments by the current president, Jakaya Kikwete, that retired heads of state should be left in peace unless there are “serious allegations of wrongdoing”.
The implication of immunity may do ex-leaders more harm than good, and certainly does little for public confidence in the rule of law.
Accusations swirl around the tenure of Benjamin Mkapa, president from 1995 to 2005, which saw helter-skelter privatisations as well as the BAE radar deal and the procurement of a £15m presidential jet. There is no evidence Mr Mkapa personally abused his office – indeed, he enjoys a reputation as a model of clean governance in Africa. But even were full investigations to be launched, the creaking judicial system makes both securing convictions and clearing names a glacial process.
Mr Kikwete has been keener to investigate scandals that have erupted on his own watch. Most recently, the government has retained the services of Ernst & Young, the international auditor, to pick through the Bank of Tanzania’s foreign exchange accounts after the International Monetary Fund demanded an investigation into claims that $200m had been misappropriated.
“There are several big accusations out there that the government needs to be seen to address,” says Philip Parham, British high commissioner. “In terms of investor confidence, it’s just as important to address false allegations.” Investor confidence is not helped by cases such as that of Silverdale farm near Mount Kilimanjaro.
In spite of the existence of a receipt dated November 2004, Stewart Middleton and Sarah Hermitage, a pair of British investors, have been unable to secure the lease’s registration. Mr Middleton and Ms Hermitage say they have been harassed and Mr Middleton has been periodically imprisoned.
Roger Gale, Ms Hermitage’s British MP, is damning. “We are putting up Tanzania as a shining example … [but] it is corrupt,” he says. He is pushing ministers to exert pressure by withholding some of the £105m that the UK, the biggest donor, has committed to Tanzania’s budget for 2007-08. Mr Parham says he has raised the Silverdale case “at the highest levels”. But he stresses: “More [corruption] is coming to the fore. That does not mean that the actual number of incidents is growing.”
Of more interest than headline-grabbing scandals to the millions of vulnerable workers in the informal economy – estimated to account for between 30 per cent and half of the economy – is so-called petty corruption. Even in the formal sector, the World Bank’s recent economic memorandum on Tanzania found that 35 per cent of business managers said they typically had to bribe local officials “to get things done”.
Mr Kikwete says that his campaign to combat corruption is in the national interest, regardless of the governance indicators that inform donors’ aid allocations.