Tanzania’s Billions Lost -CAG Report Exposes Governance Crisis 2022-2023

By Adonis Byemelwa

Dar-es-salaam. As Tanzania's national debt balloons to a staggering Sh85 trillion, the shadow of corruption and mismanagement looms large over the country's government. Despite concerted efforts to enhance the performance of public entities through subsidies and expert oversight committees, the Controller and Auditor General's (CAG) report for the fiscal year 2022/23 has unveiled a troubling trend of systemic financial mismanagement.

This alarming revelation comes amidst significant losses incurred by five key organizations: Air Tanzania Company Limited (ATCL), Tanzania Telecommunications Company Limited (TTCL), Tanzania Railways Corporation (TRC), Tanzania Investment Company (Tanoil), and Tanzania Postal Corporation. These findings raise serious concerns about financial accountability and transparency within Tanzania's government.

Presenting the audit findings to President Samia Suluhu Hassan at Chamwino State House in Dodoma on March 28, 2024, CAG Charles Kichere revealed alarming figures indicating substantial financial losses suffered by these entities. ATCL, for instance, reported a staggering loss of Sh56.64 billion during the fiscal year 2022/23, marking a troubling 61 percent increase from the previous year's loss of Sh35.24 billion. Despite receiving a significant government subsidy of Sh31.55 billion, ATCL's inability to translate this support into operational success underscores deep-rooted issues within the organization.

Similarly, TTCL incurred a loss of Sh894 million, albeit a decrease from the previous year's loss of Sh19.23 billion. TRC, despite receiving a substantial subsidy of Sh32.81 billion, reported a loss of Sh100.7 billion, reflecting a 47.32 percent decrease from the previous year's loss of Sh190.01 billion. Tanoil's financial woes persisted, with the company reporting a loss of Sh76.56 billion, attributed to delayed payments to suppliers and decreased fuel sales revenue.

Furthermore, Tanzania Postal Corporation recorded a loss of Sh1.34 billion for the fiscal year 2022/23, signaling ongoing challenges in operational efficiency and revenue generation. These losses underscore a pervasive pattern of financial mismanagement and inefficiency plaguing Tanzania's public sector, raising serious questions about the effectiveness of current governance and oversight mechanisms.

The CAG's recommendations to enhance operational efficiency, revenue collection, and cost reduction, while shifting away from inefficient investments, underline the urgent need for systemic reforms within Tanzania's government institutions. Additionally, the call for competent, innovative, and commercially efficient leadership reflects a recognition of the fundamental role played by effective governance in driving organizational success and accountability.

President Samia Suluhu Hassan's commitment to addressing the deficiencies highlighted by the CAG and the Prevention and Combating of Corruption Bureau (PCCB) is commendable, signaling a recognition of the gravity of the situation and a determination to enact meaningful change. However, addressing the systemic challenges outlined in the CAG report will require a comprehensive and concerted effort involving all stakeholders, including government officials, civil society organizations, and the private sector.

Beyond the immediate concerns raised by the CAG report, it is imperative to acknowledge the broader implications of systemic mismanagement of funds within Tanzania's government. The erosion of public trust, the stifling of economic growth, and the exacerbation of socio-economic inequalities are just some of the consequences of ineffective governance and financial mismanagement. Moreover, the persistence of these challenges undermines Tanzania's development aspirations and jeopardizes its standing in the global community.

The need for decisive action to combat corruption, improve accountability, and strengthen governance structures cannot be overstated. President Samia's calls for the introduction of a banking system to manage loans effectively and her emphasis on the importance of systems and discipline in resource management reflect a recognition of the need for systemic reforms to address the root causes of financial mismanagement.

President Samia Suluhu Hassan's recent address at the State House in Dar es Salaam highlights the urgent need for systemic reforms to combat corruption and mismanagement of funds in Tanzania. Drawing parallels with success stories from countries like Singapore, New Zealand, and Rwanda, where bold reforms and strong political will have effectively tackled corruption, accentuates the importance of decisive action in Tanzania. These countries serve as shining examples of how political commitment, effective institutions, and active citizen participation can lead to meaningful progress in combating corruption and fostering accountable governance.

Moreover, President Samia's acknowledgment of Article 8 of Tanzania's constitution, empowering the people to hold the government accountable, aligns with the constitutional frameworks in these successful nations, where transparency and accountability are enshrined principles.

However, she also acknowledges the potential consequences of government negligence or failure to uphold these principles. In highlighting the frustrations and disillusionment among the citizenry due to recurrent reports of financial mismanagement, she implicitly warns that failure to address these issues could lead to public unrest and the erosion of trust in governmental institutions.

The recent revelations from the Controller and Auditor General's (CAG) report, coupled with President Samia's stern rebuke of negligent officials and her call for comprehensive reforms, underline the gravity of the situation. Failure to heed these warnings could indeed lead to citizens taking matters into their own hands, as suggested by the mention of the "hapless, jobless, and irate mob." This stark warning emphasizes the potential consequences of continued corruption and mismanagement, highlighting the importance of swift and decisive action to address these systemic challenges.

Therefore, President Samia's address not only underscores the imperative for systemic reforms to combat corruption but also highlights the constitutional mandate for accountability. By drawing inspiration from success stories of other nations and recognizing the power vested in the people by the constitution, Tanzania can forge a path towards transparent governance and sustainable development, averting the potential consequences of public unrest and instability.