Fake payments, fictitious weights, non-existent farmers: What is wrong in Tanzania?

Minister for Agriculture Japhet Hasunga said here yesterday that he has formed a probe team of five people to verify the buying processes and payments made after it came to light that there were numerous irregularities.

Hasunga also directed the Controller and Auditor General (CAG) to look into the 53.2bn/- that had remained in the suspended Cashewnut Development Fund, money that was earmarked for building three cashewnut processing factories, including warehouses.

Addressing a press conference, the minister said the government purchased the crop through the Cereals and Other Crops Board but it has come to light that irregularities including fake payments, fictitious weights and non-existent farmers were prevalent.

He urged farmers who are still to be paid to submit their claims to the probe team, saying the team shall work in partnership with a ministerial committee formed to verify the crop and whose task formally ends by January 15.

He said the funds issued by the government for the task – over 700bn/- was a lot of money hence the need to ensure it reached the farmers.

“We must verify the names from primary to secondary cooperatives and those that went to the payrolls for payment by TADB. This will be done by working in conjunction with the Cereals and Other Crops Board to check those names that went to the bank, including the money that is recorded to have been paid to the bank, whether it all went to farmers’ accounts.”

The probe team will also look into whether there was dirty business in the transactions, he declared, noting that the ministry discovered that some cooperatives, even though the defense and security committees verified them, had fraudulent payments especially on whether the farmers who were paid were genuine.

The minister gave an example of Coast Region in Sangasanga Amcos that cheated by showing it had collected 218,000 kgs while in reality it had delivered 212,000 kgs.

The coop also cheated in saying the cashew nuts collected was of Grade 1 quality while 244 kgs were of inferior quality. There were fictitious payments to nonexistent people who were not farmers, with a total of 222.3m/- being paid to the ghost farmers, he stated.

“This irregularity is in respect of only one cooperative, but we have also faced with similar situations in Tandahimba. If it was not for the trustworthiness of people who were verifying around 1.6bn/- would have been paid fraudulently,” the minister declared.

He said some cooperative officials in collaboration with others used fictitious names for effecting payments, and to ensure there is no repetition, the next buying season the government will verify the names from the cooperatives, how much each farmer is to be paid from the kilograms of the crops he has sold so as to know they are not ghost farmers.

If there is any farmer who is yet to be paid for his crop, then his name must be known and why he is yet to be paid. Up to the end of the season 222,561.2 tons of raw cashew crop was collected valued at 723.8bn/-, he specified.

“The cashew nuts were of different grades; for Grade One 204,476.1 tons valued at 674.71/- was collected, but for Grade 218,084.9 tons valued at 47.7bn/- was collected.”

The crop that has already been paid for was 217,786 tons valued at 707.8bn/-.

“We have already paid for this crop but there are several issues that have come up, — first some of the farmers are yet to be paid and the aim of the government is to pay all of them,” he said.

During their last meeting with President John Magufuli, regional commissioners for Mtwara, Lindi, Ruvuma and Coast regions were asked how much money was still demanded by farmers. Everyone stated his amount and the total came to 40bn/-, whereupon the president sanctioned that the money be issued for payment to farmers.

Special audit by CAG

In December 2016 the government suspended the Cashew Nut Development Fund and 53.2bn/- that was in the fund’s account was earmarked for the construction of three cashew nuts processing factories and warehouses, the minister recalled.

He said another use of the fund money was to develop the crop but the Cashewnuts Board put the money to other uses.

What surprised the ministry was that when the cashew nuts auction was in progress those who ordered gunny bags said the government owes them money for distributing bags for the 2017/18 season.

“There is a firm demanding 7bn/-, another one 5bn/- and they said they had already distributed the bags while the procedure was that the buyer buys the crop and pays for the bags. The question is why they are demanding the money now,” he elaborated.

“When the ministry asked for an explanation from the board they provided some detailed expenditure for the money that had remained in the fund – 53.2bn/- and out of which they spent 28.1bn/- to buy inputs, but worse still they said they spent 12.2bn/- to buy gunny bags. Now the question is if the money was used to pay for the bags, why is there a new demand,” he quizzed.

“There is money that was issued to pay for past bank loans to cooperatives – Tanecu was paid 1.87bn/-, Koecu 2.12bn/- instead of being put to the construction of cashew nuts processing plants and warehouses. And worse, as the board was supervising the exercise it paid out 638.9m/- to board executives, some cash used to pay for sitting allowances for stakeholders – a total of nearly 1bn/- to organize the sittings.”

What goes on in the current season

Since the start of open auctions for cashew nuts the exercise is going on well and the number of buyers is big while the prices also go up due to the crop’s large demand, the minister added.

source: IPP