Tanzanian Association Oslo

Ballali`s hoodwink

operation on minister Meghji:

How big the cover-up?

Former Bank of Tanzania governor Dr Daudi Ballali

’’THE governor was obviously not working alone. He had to be colluding with very powerful people in government, who were protecting him’’

THISDAY REPORTER
Dar es Salaam

EVIDENCE is fast emerging that former Bank of Tanzania governor Dr Daudi Ballali orchestrated a more extended cover-up than perhaps initially thought to try and conceal the massive looting of funds from central bank coffers.

It has now been established that since 2006, Ballali headed the operation to deceive key figures in government about a constant river of anomalies in huge payments made from the BoT´s external payment arrears account.

With reports of funds misuse from the account mounting up, the then BoT supremo issued lie after lie to auditors and senior government officials about the true nature of the payments.

Financial sector sources now insist Ballali could not have been working alone in such a complex cover-up operation involving hundreds of billions of poorly accounted-for shillings paid out from a key central bank account.

’’It is certainly very, very strange that he (Ballali) was able to mislead so many people in government, including the finance minister, about such suspect payments and managed to avoid being caught for so long,’’ said one source.

’’The governor was obviously not working alone in this. He had to be colluding with some very powerful people in government who were protecting him,’’ the source added.

Insiders say they are baffled at how Ballali was able to hang on to the BoT governorship for more than a year even after it emerged that he had blatantly lied to finance minister Ms Meghji about the fraudulent payments.

While the payments authorised by Ballali were originally uncovered in September 2006, it was only in January 2008 (a whole 16 months later) that he was finally sacked by President Jakaya Kikwete.

’’It’s quite remarkable that even after it was clearly established that Ballali had lied about the illegal payments from the EPA account, he was still allowed to keep his job and possibly continue with the looting,’’ said another source in government.

Well-placed sources say while the latest special audit uncovered dubious payments of over 133bn/- in the BoT’s external payment arrears account at the BoT during 2005/06 alone, this is most likely just the tip of the iceberg.

’’By the time the full extent of looting at the central bank over the entire period that Ballali (almost 10 years) was in charge is established, the figures could run into several billions in terms of US dollars,’’ said yet another source.

Ms Meghji herself has told THISDAY that she was personally distressed to discover that the disgraced governor had deliberately misled her about the illegal payments of nearly $30.8m (approx. 40bn/-) to one company going by the name of Kagoda Agriculture company Limited.

She said Ballali lied to her that the payments to this little-known company were ’’authorized and used to finance sensitive government expenditure’’ in matters of national security.

The governor effectively used this ploy to put to an end serious audit queries being raised at the time by the BoT’s regular external auditors, Delloite & Touche of South Africa, after noting the dubious payments to the Kagoda company from the EPA account during a routine audit in 2006.

The minister said after giving her false advice on the matter, Ballali personally drafted a letter - which she signed - stating that the payments to Kagoda had purportedly been authorized by the government.

This letter was delivered to Delloitte & Touche on September 15, 2006. But just four days later after apparently being told of Ballali’s deceit - Ms Meghji wrote a retraction letter to the same auditors, dated September 19, 2006.