Top businessmen and politicians given ultimatum to repay Sh300 billion CIS loan

Thursday June 20 2019

 

By The Citizen Reporter @TheCitizenTz news@tz.nationmedia.com

Dar es Salaam. The ministry of finance and planning has given a last notice to the beneficiaries of Community Import Support (CIS) and Food Aid Counterpart Fund (FACF) to pay their debts otherwise face legal measures.

In a statement released to the media and signed by the permanent secretary at the ministry of finance and planning Mr Dotto James, indicates that more than 980 companies, industries and individuals acquired the loans.

According to the statement, CISF and FACF are soft loans, which the companies, industries and individuals acquired.

The statement further noted that in accordance to the Commodity Import Support Regulation Act, CAP 261 R. E. 2002 (s.8 (1)(b) a beneficiary is supposed to re-service the debt 18 months after acquiring it.

If a beneficiary fails to do so he/she will be forced to re-service the debt with an interest rate similar to, what the government pays the Bank of Tanzania (BoT), when it acquires a loan.

“The government is giving a final notice to the defaulters, who failed to honour the previous notices issued in December, 30, 2015 and April 5, 2018…legal measures will be taken against the defaulters after publication of this notice,” read a statement in part.

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Some of the defaulters, who were named in the notice are top businessmen, politicians and individuals.

Reached for their comments some of those, who were named in the list, who include former cabinet minister Mr Stephen Wassira, who owns Siza Cold Storage Co.Ltd, said he has submitted ‘all correspondents’ to TIB investment bank’.

“I have submitted all my correspondents to the TIB investment bank so if you want details you can call them,” said Mr Wassira in a telephone interview.

On his part Chauma national chairman Mr Hashim Rungwe, who owns Bahari Motor Co Ltd, said he will speak on the matter tomorrow as he wasn’t in the city.

The statement released by the ministry named fifteen individuals, who acquired loans through CISF and FCF

In April 2015 the government vowed to collect over Sh300 billion that was issued as loans to private companies under the Commodity Import Support (CIS) scheme over 20 years ago.

"We will mercilessly collect all of this money from businesspeople... we cannot afford chasing around petty traders and hawkers and sparing big businesspeople who have taken government money," the then Deputy Finance Minister, Mr Mwigulu Nchemba told the Parliament.

Some development partners teamed up with the government to facilitate the importation of key commodities in the country about ten years ago to ease, among other things, food shortages to help the economy

For example the government of Japan provided a grant of 23 billion yen to be loaned to companies for importation of various products. It was agreed that once the money is recovered, it would be used to develop small firms and local entrepreneurs.

But according to reports from the Treasury, only some Sh142 billion has been recovered but the fate of the rest of the money is unknown because some of the companies, it has emerged, were fake.