Public Contracts and Corruption: Has Tanzania Overcome Its Demons?

By Ajong Mbapndah L

Since Samia Suluhu Hassan took office as the President of Tanzania in March 2021, she has been working to normalize the country's political and democratic systems. It's an onerous task that involves tackling the pervasiveness of corruption. A challenge apparently well received by the Tanzanian president who, after just two weeks in office, discovered – along with the general public - a scandal involving the over-invoicing of a Boeing 767-300 freighter that was negotiated at $37 million but invoiced for $86 million.

“Where did this invoice come from? What did the contract say? And when you received the invoice, you still presented it to the government for payment. Stupid! What steps did you take after you received the invoice?” Samia Suluhu Hassan asked those responsible for this illegal, but far from isolated, money-making operation. The director-general of the Tanzania Government Flight Agency was sacked and other high-ranking officials managing state-owned companies have since faced the same fate.

The March 2023 release of a report for 2021/2022 by the Prevention and Combating of Corruption Bureau (PCCB) and Mr. Charles E. Kichere, the Controller and Auditor General (CAG), was a useful reminder to all those who might try to downplay the magnitude of corruption in Tanzania. The President made public an overbilling that led the government to spend more than $10 billion on tablets.

Samia Suluhu Hassan said “It’s disappointing that all these are happening while we have project supervisors in each ministry and government institutions, the over invoicing occurs every now and then. This is unacceptable,” adding “This problem can be seen in all large projects, it’s so unacceptable…those who are responsible for supervising the projects have to be patriotic and aggressive in handling this”.

She called on project managers to show "patriotism" and is considering an overhaul of the administrations in charge of (major) projects. Some of these parastatal organizations, such as the National Development Corporation (NDC), are considered inefficient. The President has apparently identified a multifaceted problem.

The Bank of Tanzania might land on this list after having launched a tender in July 2022 to renew the banknotes in circulation. The process has been on a chaotic and as yet unfinished course. The pre-selection of companies that specialize in banknote manufacturing was revoked early last year following an appeal by global industry leader De La Rue. The renewed invitation to tender, this time under the authority of the Public Procurement Appeal Authority, allowed the British company to be included in the shortlist. However, while the bids were submitted and made public on April 17, 2023, a decision has still not been made.

This standstill becomes even more questionable with the news that some senior officials from the Bank of Tanzania were asked to approach the British company (which recently closed its production site in Kenya) “off the books”, even though the prices announced by De La Rue are about 2 to 3 times higher than those of the other shortlisted competitors. Could this simply be an issue of mismanaging a tender worth over $310 million (Sh822 billion)?
There is little doubt that the highest state authorities will have their say on a subject as sensitive as currency. The difficulties and never-ending cash scarcity experienced by Nigeria for almost a year now, show a path that should not be followed.

As President Hassan emphasized last July, "Fighting corruption should be treated as liberation for the African continent". This liberation might be encountering resistance, but by reaching all sectors of the economy, it is the only way to achieve the true economic and democratic development hoped for by everyone.