Magufuli differs with Bunge team on new style of govt payment

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His views differed with those of the Parliamentary Budget Committee which early in the week said it was opposed to the TSA, fearing it will disrupt development funding arrangement.


Dar es Salaam. President John Magufuli yesterday stressed the need for the proposed Treasury Single Account (TSA), saying it will improve management of public funds.

“Through the account, payment will be monitored openly to reduce misuse of government funds,” said Dr Magufuli at a function in which the government received Sh1.5 billion dividend from the Tanzania Telecommunications Corporation.

His views, however, differed with those of the Parliamentary Budget Committee which early in the week said it was opposed to the TSA, fearing it will disrupt development funding arrangement.

East Africa Community member countries have approved the adoption of the TSA as a tool to raise public sector transparency and accountability.

The TSA is billed as a means to seal loopholes through which the governments were losing billions of shillings in tax payers’ money through corruption and embezzlement. Experts have also averred that the system will reduce government borrowing and streamline channeling of funds to needy areas.

“Most successful countries have a TSA and EAC countries agreed to have this in place,” said President Magufuli, adding, “The matter is in Parliament and MPs will deliberate and advise accordingly.”

Reports show that the TSA is yet to take effect in all of the EAC countries despite being adopted. Kenya enacted it in 2017.

Finance minister Philip Mpango said during the tabling of the 2018/19 budget last Thursday that the account was being established as part of the regional agreement. He told Parliament it will ensure effective control and management of government resources.

“This measure will reduce the number of government accounts operated in the commercial banks and central bank; reduce costs related to services offered by commercial banks to the government and improve the financial position of the Paymaster General account,” said Dr Mpango.

But the Budget Committee categorically rejected the TSA proposal, saying the move would affect implementation of projects, especially those with funding kitties established by law.

“The committee totally disagrees with this matter because it is an internal matter (by respective countries) how to collect and use its financial resources,” said Ms Hawa Ghasia, the chairperson. She added: “Parliament is not bound to accept the agreement of the EAC member countries as doing so will affect project implementation.”

According to her, the agencies which would be affected include Rural Energy Agency (Rea), Railway Fund, Water Fund, Road Fund and funds which cover traditional crops such as coffee, cotton, cashew nuts, sisal, tobacco and tea.

ACT Wazalendo party leader Mr Zitto Kabwe said last week that the TSA was a good idea but may affect efficiency of other organisations, especially the cereal boards. He proposed it delayed for thorough preparations.

“We still do not know the whereabouts of Sh1.5 trillion recently reported as unaccounted for by the Controller and Auditor General… possibly it was directed to expenditure not approved by the Parliament. Putting all funds in the TSA is even more dangerous….maybe until after 2021,” said Mr Kabwe.

Experts’ caution

Some economic experts say the move may have little impact as the government missed to address the actual problem.

“I guess there will be delays in releasing development funds to the local government authorities and other agencies. There will be too much task to the paymaster general. The government is trying to do away with a problem of mismanagement but may create others,” said Dr Abel Kinyondo, the director of strategic research at Repoa, a think-tank on economic issues.

“If the government is addressing mismanagement then the solution is ensuring good governance – transparency and accountability – in the local government and MDAs. I see more removal of resources from the local governments,” he added.

Prof Honest Ngowi of Mzumbe University said it was a good idea in controlling public funds but was also worried by the possible delays in funding projects.

He said the government might be reducing the number of accounts in banks but it may increase transactions and therefore added cost.

“The best approach is to solve mismanagement issues in the LGAs and MDAs. There is also a need for a thorough cost-benefit analysis to avoid compromising efficiency of public institutions,” said Prof Ngowi.