Tanzania’s escrow scandal still a puzzle as Tibaijuka is sacked

Former United Nations Habitat executive director Anna Tibaijuka who went on to become the Cabinet Minister for Land, Housing and Human Settlement Development in Tanzania. President Jakaya Kikwete on December 23, 2014 sacked the Prof Tibaijuka over the Tegeta escrow account scandal. FILE PHOTO

What you need to know:

  • Prof Tibaijuka’s sacking came only a day after she rejected calls to resign over ethical issues surrounding the manner in which she received TSh1.6 billion (Ksh88m), part of the escrow monies.
  • President Kikwete also said he had formed a special team to probe Prof Sospeter Muhongo, the Minister for Energy and Minerals over his role in the controversial withdrawal of TSh202 billion from the Tegeta escrow account.
  • The President also said the Financial Intelligence Unit (FIU) has been directed to investigate Stanbic Bank and other financial institutions from which the money from Tegeta Escrow account was transferred.

DAR ES SALAAM

President Jakaya Kikwete Tuesday sacked the Minister for Land, Housing and Human Settlement Development, Prof Anna Tibaijuka over the Tegeta escrow account scandal.

The president announced the decision when delivering his verdict on the scandal in a televised address to the nation.

Prof Tibaijuka’s sacking came only a day after she rejected calls to resign over ethical issues surrounding the manner in which she received TSh1.6 billion (Ksh88m), part of the escrow monies.

It was apparently the only brighter side of President Kikwete’s more than two hours address during which he gave a long background of the IPTL saga that has blotted his administration.

The head of state’s take on the scandal largely left many questions unanswered adding to the recommendations of Parliament that investigated the scandal and recommended far-reaching steps within government.

PROBE UNDER WAY
But many of the recommendations were left hanging on Tuesday.

President Kikwete also said he had formed a special team to probe Prof Sospeter Muhongo, the Minister for Energy and Minerals over his role in the controversial withdrawal of TSh202 billion from the Tegeta escrow account.

He was responding to recommendations made by Parliament.

The parliament recommended the two ministers, energy and minerals permanent secretary Mr Eliakim Maswi, Attorney General Francis Werema should be sacked while the Tanesco board of directors should be dissolved over the IPTL scandal.

Mr Werema has since resigned from his position.

LEADERSHIP ETHICS
Prof Tibaijuka, the former UN-Habitat, Executive Director, in Nairobi, was named among people who received Sh1.6 billion from VIP engineering and marketing owner Mr James Rugemalira.

“We have spoken to Prof Tibaijuka and she told us she received the money as a donation for her school; but we asked ourselves if the money was for the school why was it transferred to her account,” President Kikwete said.

“No matter what the reason it was against public leadership ethics; so we asked her to step aside so we can appoint another minister,” added the president to the cheers by the crowd. Last week Prof Tibaijuka vowed not step down over the Tegeta escrow account scandal.

She protested her innocence claiming that even the president ‘‘will be disappointed’’ by her resignation.

Speaking about Prof Muhongo, the president said he will make his decision after receiving a report from a team he formed to investigate him.

President Kikwete also said he has instructed the responsible organs to investigate Energy and Minerals PS Maswi and take appropriate measures against him.

CHIEF JUSTICE IN CHARGE
Said the president: “As for the recommendation to dissolve Tanesco board of directors there is no need since its term has already expired; but since Mr Maswi is a public servant there are procedures which have to be followed so I have directed responsible organs to act.”

The parliament also asked the president to form an inquiry team to investigate Judges Aloycius Mujulizi and John Ruhangisa whose names appeared on the list of people who received money from James Rugemalira, the owner of VIP Engineering.

VIP sold its 30 per cent shares in IPTL to PAP for $75 million.

However, President Kikwete said that due to the judicial procedure the matter has been left on the Chief Justice’s hands.

Speaking about the controversy surrounding the owner of the money in the Tegeta Escrow account, the president admitted that the money belonged to Pan Africa Power (PAP) who acquired IPTL shares.

STANBIC PROBED

However, the President said the government was supposed to collect Sh21.7 billion as capital gain tax from IPTL as it sold its shares.

According to President Kikwete, the Tanzania Revenues Authority (TRA) has already contacted IPTL and the firm has agreed to pay the tax.

Responding to other recommendations made by Parliament the President said it would be very dangerous for the government to nationalise IPTL plants especially at a time when the country was encouraging the private sector to invest.

The President also said the Financial Intelligence Unit (FIU) has been directed to investigate Stanbic Bank and other financial institutions from which the money from Tegeta Escrow account was transferred.

The president said the government will also investigate the controversy behind PAP acquisition of IPTL shares. According to him there are allegations that PAP fraudulently and falsely purchased 70 per cent shares in IPTL.