Kisumu 11-2-2008
  By Leo Odera Omolo
  
  The Tanzania government has issued an ultimatum to nearly 980 firms and businesses that have defaulted on payments to the Commodity Import Support (CIS) fund amounting to $ 180 Million to return the money or face the legal consequences.
  
  According to reports appearing in local press the government move comes in the wake of the Bank of Tanzania’s mega scandal in which more than USA 133 million was improprietly paid out to 22 firms in the account of Tanzania External Payment arrears (EPA) account during the period of 2005/2006
  
  The 180 firms have been given three months to return the funds they took as loans from the Tanzania Iknvestment Bank (TIB) and other local banks
  
  The Deputy Permanent Secretary in the Ministry of Finance Ramadhani M. Khijah told the press last week that the government would follow up this “naming and shaming” with legal action against defaulters.
  
  Mr. Khijah was further quoted as having said that the fund was set up by the government by development partners to be disbursed to finance institutions, industries and various other business to enable them to import inputs and raw materials from overseas when the government had run short of foreign currency to spare.
  
  “The CIS fund was provided as interests free loans’ but if the lender failed to repay within 18 months a 17 percent interest rate was to be levied” the deputy PS said.
  
  It has since turned out to be the scandal which is equivalent to be intermous Kenya’s Goldenberg, Scandal which had consumed billions of taxpayer’s money during the last reign of the retired President Daniel Arap Moi.
  
  Japan and other donor established the CIS fund in the 1980’s facilitate the importations of special of machinery and other strategies goods, with the fund acting as a loan  facility for those who had substantial proof they needed the Forex to import crucial goods into the country. It was during the country’s economic recession of the 1980s. Tanzania foreign currency reserves at the time were in critical state and had dried out of hard currency money.
  
  However, in 2002 the management of this fund was transferred from the Ministry of Finance to the Bank of Tanzania (BOT).
  
  In 2004, Japan said if would no longer continue to supply the fund and would instead contribute towards the budgetary support like other donors
  
  Sources in Dar have disclosed to us that many of the entities that took out CIS loans have not re paid then while come have closed down business and disappeared mysteriously in the this said
  
  END

  leooderaomolo@yahoo.com