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Last Updated: Monday, 7 February 2005, 00:19 GMT
Donors bank on eradicating corruption
By Daniel Dickinson
BBC News, Dar es Salaam

Tanzanian capital
Tanzania said it is committed to reducing poverty
A new approach to giving development aid to some of the poorest countries in Africa could be fuelling corruption, according to some critics.

Western governments are testing the model, which is called budget support in Tanzania.

It is unlike the old approach to giving aid which involved channelling money to particular projects.

Budget support means money is given directly to the government.

Only countries, like Tanzania, that have demonstrated a strong commitment to reducing poverty are eligible.

Finishing touches

All around Tanzania, primary school pupils are returning from their holidays to refurbished school buildings, new books and desks as well as some newly trained teachers.

At the Mbagala primary school on the outskirts of Dar es Salaam, the finishing touches are being put to a new classroom.

Budget support enables government to set its own priorities
Caroline Sergeant, Department for International Development
The head teacher, Zakayo Mlendeka, says it is a new departure for his school:

"We've got new buildings and new desks and now there are a lot more children coming to school. Our parents are now very happy."

Schools like Mbagala primary are benefiting from a huge increase in the amount of money the government is putting into primary school education.

The money is allocated through the government's annual budget. More than 40% of that money has come from foreign donors.

The British are the leading promoters, giving about $120m this financial year.

Budget support

Caroline Sergeant of the UK's Department for International Development says budget support makes more sense than project support.

"Providing resources through projects takes away government ownership of the development process and also creates lots of parallel systems for managing money and depletes the capacity of government officials themselves," she says.

"So budget support enables government to set its own priorities, to set its own systems, to strengthen its own systems in delivering public resources and aid resources to the services that are most needed by the poor."

The budget support approach seems to be working in Tanzania with the government increasing its spending in sectors like health, infrastructure and most successfully in education.

But budget support does have its critics. They say it will cause more corruption in a country which is battling to stamp out graft.


Jenerali Ulimwengu is a newspaper publisher, a former member of parliament and one of the few people willing to publicly link budget support to corruption.

"Every year, the Controller and Auditor General who is a government employee, gives out a report which keeps on saying that so many billion shillings have been squandered, have disappeared without any trace.

"So what magic will donor money do to change this type of culture? It will fuel corruption more intensely, because the more money you have circulating in a corrupt system the more corruption you have."

A report by the auditor general says that in the year up to June 2002, about $48m of government expenditure was not supported by the correct documentation.


On the streets of Dar es Salaam, it is clear that corruption remains a very real issue for ordinary people.

You have to have the right systems which are transparent, that ensure that every cent can be accounted for
Gray Mgonja, Ministry of Finance
It does not take long to find people with personal experiences - the bus driver who is forced to pay a bribe to a policeman to keep his vehicle on the road, the would-be secretary who says she will only get a job if she can give "a small present" to a company official.

One parent told me that some parents bribe teachers to make sure their children pass exams. Others complain of "rampant corruption in the corridors of power."

The existence of the Prevention of Corruption Bureau shows at least that the government acknowledges that graft is a problem.

Gray Mgonja, the Permanent Secretary in the Ministry of Finance, argues that more money in the budget will help to strengthen anti-corruption measures.

"We have done a lot in this area and corruption is about systems," he says. "You have to have the right systems which are transparent, that ensure that every cent can be accounted for."

The British back up this view and have made a commitment to moving towards giving most of its aid directly to the government. But while more international donors are adopting the budget support approach, they are unlikely to go as far as the British until they are sure it will help to eradicate corruption and bring long-lasting change.

Meanwhile, the Tanzanian government can continue to rely on budgets boosted by foreign aid.

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