Tanzania – The politics of being Auditor General

Tanzania’s Comptroller and Auditor General (CAG), Prof. Mussa Assad, is by turns the most celebrated and vilified man in the country right now. His predicament, far from a matter of personality, speaks to broader questions of accountability, institutional oversight and economic strategy under President Magufuli.   

The current tensions began in early January. Speaker of Parliament Job Ndugai accused Prof. Assad of “contempt of Parliament” after the CAG referred to parliament’s oversight performance as “weak” during an interview. The Speaker summoned Assad before a parliamentary disciplinary committee to explain himself, meanwhile briefly suspending the work of parliament’s oversight committees.  

Fast forward to April and the disciplinary committee tabled its report in Parliament, recommending that Parliament suspend work with the CAG, a recommendation that was then voted through by the ruling party majority.

This move elicited a prompt reply from Prof. Assad, warning of a potential constitutional violation. The decision to stop working with Assad came at a sensitive time, just as Parliament was due to debate the CAG’s audit report for the financial year 2017/2018. Assad pointed out, “My office has already submitted the audit report to the President, and it must be submitted to parliament in seven days,” adding, “If this is not done, it will mean breach of the constitution.”

A campaign quickly picked up on social media with many activists praising the CAG and demanding Parliament honour its constitutional duties. Ndugai responded by clarifying that Parliament would review the CAG’s reports, but that it would work with his office and not with the man himself, that is, with Prof. Assad. The Speaker went on to suggest that Assad should in fact resign. This latest move has elicited a response in kind as an online petition calling for Ndugai’s ouster is now fast gaining signatures.

The immediate concern raised by Ndugai’s critics is that he is effectively undermining the independence of the CAG, threatening Prof. Assad to discourage proper oversight of public finances. Relatedly, many see the Speaker’s intervention as part of a cover-up, the main aim being to stop revelations of money “missing and misappropriated under the government of President Magufuli.” While Magufuli has himself remained silent on the CAG issue, Ndugai has developed a reputation as the President’s right-hand-man in Parliament, adding to the impression of executive interference in key oversight institutions, first Parliament and now the CAG. Ndugai’s latest intervention, moreover, is not the first one to come at a sensitive and seemingly strategic moment. When the Speaker challenged the CAG back in January, it was just as a special audit report, critical of government’s financial management, was due to be debated in Parliament.

Whatever the reality of the situation, Ndugai’s heavy-handed interventions certainly reinforce the impression that the government has something to hide. But this raises the question, what does the CAG’s latest audit report actually tell us?

On certain points, it paints a fairly good picture of government’s financial management. For instance, 97 percent of the 241 government bodies audited by the CAG had their accounts in perfect order, a percentage that compares well with the previous administration of President Jakaya Kikwete.

Yet on other points, the CAG’s report does raise significant concerns, not only about government accountability but also about the viability of its current development strategy.

Critics have been quick to note several anomalies, for instance, poor reconciliation of reported funds released by the treasury and received by relevant government bodies. Another worry is the decision to transfer the vastly expanded budget of the state-owned Air Tanzania Company Ltd. (ATCL) to the State House budget, i.e. the President’s office, which the CAG does not audit.  As opposition MP Zitto Kabwe affirmed, “This issue is very important because past experience shows that anything that has a stench of corruption or doubtful expenditure Government moves it to the State House budget because it knows it is not openly audited” (my translation).

Leaving aside accountability, the CAG report highlights several issues regarding government performance. These include delays in development projects due to government’s failure to pay, underperformance of state-owned enterprises (including ATCL), losses at state-owned banks like the Tanzania Agricultural Development Bank (TADB), and unpaid debts owed to various pension funds.

Magufuli has built his no-nonsense, “only work”, “bulldozer” brand, in part, on claims to rapidly implement big infrastructure projects and with a preference for public enterprise in the name of efficiency and cost-cutting. He has also relied on funding from pensions and banks like TADB, which among other things, played a central role financing the government’s ill-fated cashew-buying operation. It is thus not insignificant that these are the precise areas where the CAG has identified shortcomings in government performance.

Arguably, the CAG’s report is most damning not where it points to potential financial mismanagement; rather, the truly concerning take-away is that central pillars of the government’s current development approach are resting on shaky foundations [i]. Ndugai’s criticism of the CAG seemingly only draws more attention to these findings. And in any case, as the IMF revises down Tanzania’s growth forecast from 6-7 percent to a mere 4 percent, the real-world results will be all too plain to see.

[i] As I will elaborate in a follow-up piece, I do not mean to draw a crude contrast between market- v. state-led development strategy, perhaps leaving readers with the impression that I think Magufuli is simply too statist. To the contrary, there is good reason to think public development banks, state-owned enterprise and the like can and should play a more central role in the government’s development strategy. Indeed, a consensus on this issue began to emerge already under Kikwete. But just as there are many “varieties of capitalism”, i.e. many ways of managing a market-led economy, there are also various ways of integrating a more state-led development strategy. The approach Magufuli is currently pursuing, not least privileging public enterprises like the highly costly ATCL, is neither economically nor politically the most desirable.

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