Report of Corruption in Tanzania as of 2020

Causes of Corruption in Tanzania

Corruption in Tanzania society is ubiquitous and is a severe problem in all economic sectors. Government procurement, taxation, land management, and customs are the most influenced sectors. Investment is discouraged by petty corruption in encounters with customs, traffic, and immigration agents. The Prevention and Combating of Corruption Act (PCCA) makes it illegal to commit attempted extortion, corruption, active and passive bribery, money laundering, and bribing a foreign authority. Other corruption violations are covered by a variety of laws, although anti-corruption legislation is inconsistently administered and badly enforced. The PCCA makes gift-giving and facilitation payments used for the aim of inciting corruption in Tanzania. Companies should be aware, however, that these practices are prevalent while conducting business in the country.

Corruption Cases in Tanzania Judicial System

Corruption in Tanzania is polluted by the judicial system and influenced by the executives. The judiciary, particularly in the lower courts, is underfunded, ineffective and corrupt (HRR 2015). Court clerks and magistrates have been known to take bribes in order to open or misdirect cases or to completely control the outcome of a case (HRR 2015). Moreover, companies claim that erroneous payments are frequently transferred in exchange for favourable court rulings (GCR 2015-2016). As a result, the system’s ability to offer a fair and speedy trial is called into question (BTI 2016). In spite of widespread accusations of political meddling and judicial corruption, the judicial system demonstrated its independence in 2015 by prosecuting two former officials of the government for corruption and upholding the verdict despite later appeals (GI 2016).

Firms should be aware that there is corruption in Tanzanian courts and inefficiency, making it difficult to resolve commercial issues (ICS 2016). Similarly, businesses do not believe the Tanzanian judicial system is effective in resolving disputes or contesting government rules (GCR 2015-2016). Over a third of businesses consider the courts a significant impediment to conducting business (ES 2013). Tanzania is a party to the 1958 New York Convention on the Enforcement and Recognition of Foreign Arbitral Awards and is a member of the International Centre for Settlement of Investment Disputes (ICSID).

Effects of Corruption in Tanzania Police Force

Also, there is corruption in Tanzanian police force and lawlessness (HRR 2015). Petty corruption by traffic cops has been cited by foreign corporations as a barrier to investment (ICS 2016). Furthermore, businesses see Tanzania as underperforming in terms of police service reliability in terms of crime prevention (GCR 2015-2016). In Tanzania, half of the polled families feel the police are dishonest, and there have been multiple instances of police impunity and corruption in 2015. (GCB 2015, HRR 2015). Legal processes exist to prosecute police personnel who are corrupt, but they have not been adequately executed by authorities (HRR 2015). In 9 of the nation’s 30 regions, the mainland police are said to operate as prosecutors in lesser courts (HRR 2015).

Public Services

The major effect of corruption in Tanzania is the atmosphere it has created for doing business. Companies in Tanzania face a significant risk of corruption in the Tanzania public sector. The bureaucratic procedure for obtaining permits and licenses is time-consuming, prone to corruption and inefficient. Administrations are hampered by a lack of capacity and resources, as well as inadequately trained personnel and political influence (BTI 2016). Furthermore, public officials are underpaid, making them more vulnerable to corruption in Tanzania (BTI 2016). When it comes to applying for public services and permissions, presents and other bribes are widely accepted (ES 2013, GCR 2015-2016). As a matter of fact, companies believe Tanzania to have one of the worst rates of irregular bribes and payments among public utilities in the world (GCR 2015-2016). In Tanzania, over a third of families claim to have paid a bribe to acquire official services (GCB 2015).

Tanzania Investment Center (TIC) serves as a one-stop centre for investors, assisting them in obtaining permits, licenses, and visas, among other things (ICS 2016). In Tanzania, starting a business takes 9 processes and about 26 days, which is about the same as the average for the region (DB 2016). Obtaining a building permit, however, takes longer than it does in adjacent nations (DB 2016).

Types of Corruption in Tanzania Land Administration

Land administration is not immune to corruption in Tanzania, posing a significant danger to enterprises. More than three out of ten businesses plan to provide gifts and make irregular payments to government officials in order to acquire building permits (ES 2013). Moreover, compared to other industries, the expense of dealing with regulations and red tape in the construction sector is believed to be the greatest (Tanzania Private Sector Foundation 2015). In Tanzania, different laws enforce and recognize secured interests in moveable and real property, but no comprehensive legislation protects property rights (ICS 2016). Despite the fact that property rights and acquisition are guaranteed legally in theory under many laws, their enforceability is limited due to corruption and inefficiency in the land administration and court system (BTI 2016). In metropolitan areas, an informal land allocation system exists, which has resulted in an increase in the frequency of conflicts (BTI 2016). These conditions may provide an opportunity for corruption in Tanzania industry (BTI 2016).

Tanzanians have limited land ownership rights. Obtaining a certificate or lease of occupancy is a difficult and time-consuming process. To get access to land, foreign investors must secure a government-issued right of occupation or form a joint venture with a leaseholder (ICS 2016) from Tanzania. Land can be leased via the TIC, which has allocated plots for investors coming to the country (ICS 2016). To improve efficiency, transparency, and eliminate corruption in Tanzania land administration, the government established the Land Tenure Support Program in early 2016. (ICS 2016). In comparison to neighbouring nations, the process of registering any property in the country takes longer (DB 2016).

Tax Administration

When evaluating taxes, officials from Tanzania’s tax department are said to accept bribes. Companies in Tanzania point to bribery and irregular payments in yearly tax payments as a major problem. The corruption in Tanzania makes the nation ranking among the worst in this area worldwide (GCR 2015-2016). Companies respectively ranked tax administration and tax rates as the third and second most important obstacles to investment (Tanzania Private Sector Foundation 2015).

Tanzania’s Revenue Authority (TRA) has lately increased its efforts in curbing corruption in Tanzania by establishing strong and realistic procedures to boost service delivery and revenue collection (Daily News, March 2015). Tanzania introduced an excise tax levied on money transfers in 2014, making it more difficult for businesses to pay taxes (DB 2015). Taxes in Tanzania are paid in 49 installments and take an average of 179 hours annually, which is about half the average of the region (DB 2016).

Customs Administration

Corruption in Tanzania impedes customs clearance in the country, and international corporations have cited minor corruption within customs employees as a barrier to investment (ICS 2016). Irregular payments and bribes are frequently exchanged in Tanzania while exporting and importing (GCR 2015-2016). Tanzania’s transport firms pay bribes to authorities, including customs officers and police, worth over USD 13,000 every month to prevent unwarranted delays, penalties, and harassment (TI & EAT 2012). Customs processes are time-consuming for businesses, and enterprises should be aware that in Tanzania, the lengthy bureaucracy associated with cross-border commerce allows public officials to seek bribes (GCR 2015-2016, GETR 2014).

Customs processes are inefficient, exporting and importing commodities need time-consuming documentation to clear products at the border (GCR 2015-2016). Tanzania is one of the lowest-performing nations worldwide when it comes to cross-border trade (DB 2016). Tanzanian export and import times and costs are much higher than regional norms and greatly higher than the averages of the OECD (DB 2016). Despite this, the nation has reduced the amount of time it takes to process imports and exports by introducing the Tanzania Customs Integrated System (TANCIS), an online system for processing and downloading customs papers (DB 2016). Tanzania also made cross-border trade simpler in 2014 by modernizing facilities at the Dar es Salaam port (DB 2016).

Public Procurement

Corruption abounds in Tanzania public procurement, putting firms at risk. Government officials frequently prefer well-connected individuals and corporations when issuing contracts, and taxpayer funds are frequently transferred to companies, persons, or organizations owing to corruption, according to firms (GCR 2015-2016). Moreover, nearly seven out of ten businesses expect to provide presents in exchange for a government contract (ES 2013). Bribes and other illegitimate payments are also common in the tendering process (GCR 2015-2016). Bidding for government tenders requires investors or companies to provide a written promise to follow anti-bribery measures (ICS 2016). The government became a member of the imitative Construction Industry Transparency (CoST) to improve transparency and accountability in the construction sector in order to combat corruption in Tanzania and unproductive practices.

The director of the port authority of Tanzania was suspended in 2015 following a crackdown for breaking procurement standards (Africa Report, February 2015). The Public Procurement Regulatory Authority of Tanzania (PPRA) also blacklisted 19 enterprises from bidding for government contracts in late 2014 after they were determined to have participated in fraudulent activities (All Africa, October 2014). Another corruption scandal shook the Tanzanian government in 2014, when it was revealed that over 180 million USD in public cash had been diverted to off-shore accounts controlled by businesses and government officials (The Guardian, January 2015). A quarter of the government’s senior officials resigned as a result of the case, including the minister of energy, Sospeter Muhongo, as well as the attorney general, housing minister, and energy secretary, who was fired for moving 1 million USD to her personal bank account (The Guardian, January 2015). Three chairs of parliamentary committees resigned in connection with the case: the minerals and energy committee, the budget committee, and the governance and legal affairs committee (The Guardian, January 2015). Because of the participation of senior officials, in this case, the Prevention and Combating of Corruption Bureau’s (PCCB) inquiry has reportedly dragged on (GI 2016). International donors withheld funds from Tanzania as a result of the case (BTI 2016). To reduce the risk of corruption in Tanzania as regards public procurement in the country, companies should employ specialist public procurement due diligence tools.

Natural Resources

The mining industry, which is intertwined with investment and land issues, is susceptible to corruption in Tanzania (BTI 2016). The PCCB has conducted the majority of its corruption investigations looking into government participation in the energy and mining industries (HRR 2015). Tanzania’s mining regulatory capability is being harmed by state officials who are engaging in rent-pursuing networks (U4, March 2014). Furthermore, there is a major lack of openness around the private Mining Development Agreements among foreign corporations and the Tanzanian government, which frequently involve preferential treatment (U4, March 2014).

In line with a contract for gold-auditing that resulted in the loss of $5.2 million in government cash, two previous ministers were guilty of abusing power. A jail term of three years was imposed on the ministers (FitW 2016).

Legislation

How to stop corruption in Tanzania? Unfortunately, Tanzania’s robust anti-corruption law system is not properly enforced. Capital flight and terrorist funding are both combated under the Anti-Money Laundering Act. Attempted corruption, bribery, extortion, active and passive bribery, money laundering of foreign officials are all illegal under the PCCA. Corruption in Tanzania is classified as an economic crime, and while there are provisions for incarceration, no financial punishments exist other than asset recovery for economic crimes. The Political Parties Act, National Elections Act, Election Expenses Act and the Public Finance Act are only a few examples of laws that restrict corruption. The Organized Crime and Economic Control Act and Public Leaders Code of Ethics Act are both aimed at preventing government officials from abusing their positions of authority. Government officials must declare their assets when taking office, leaving office, and once a year during their tenures (HRR 2015). Tanzania lacks freedom of information legislation, which is critical for government transparency by allowing unfettered access to information for the public (HRR 2015). The Public Services Act mandates that every organization create enforceable standards of conduct for its personnel, among other things (LHRC 2011). The Witness and Whistleblowers Protection Act provides protection to whistleblowers.

Tanzania has accepted the AU Convention on Combating and Preventing Corruption as well as the UN Convention to counter Corruption.

Civil Society

Tanzania’s constitution guarantees freedom of expression but does not specifically guarantee press freedom (FitW 2016); a slew of restrictions promote self-censorship and impede the media‘s capacity to function efficiently (FotP 2016). Journalists studying controversial topics have been subjected to several forms of harassment (HRR 2015). Moreover, some journalists are willing to accept payments in exchange for publishing or ignoring specific material. The mainland’s media, on the other hand, is very active and reported to reflect a wide range of viewpoints, whereas most media sources in Zanzibar are under government control (HRR 2015). Tanzania’s press climate is described as “partially free” (FotP 2016).

Tanzanian law guarantees freedom of assembly, but the government has failed to uphold these rights in reality (HRR 2015). In late 2014, seventeen NGOs reported receiving frequent intimidation and threats, and in 2015, the government cancelled the licenses of twenty-four foreign NGOs for no apparent reason (GI 2016).

Other Important Things to Know About Corruption in Tanzania

• For further reading you can download the Overview of corruption and anti- corruption in Tanzania – Corruption in Tanzania pdf
• Corruption in Tanzania 2016 – https://www.transparency.org/en/cpi/2016/index/tza
• Corruption in Tanzania 2018 – https://www.transparency.org/en/cpi/2018/index/tza

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