Thursday, May 01, 2008


Role of Barclays Bank

in radar deal :

British MPs want to know



THISDAY REPORTER
Dar es Salaam


BRITISH members of parliament are now questioning the role of Barclays Bank in the 28 million pounds sterling (approx. 70bn/-) military radar transaction scandal in Tanzania.

In particular interest to the UK lawmakers are the reasons behind the British-headquartered bank’s decision to give a loan to former president Benjamin Mkapa’s government to finance the dubious deal.

A debate in the British House of Commons on Tuesday this week on the Zimbabwe election crisis, at one point changed its focus to Barclays Bank, with MPs blasting the bank´s role in facilitating the controversial Tanzanian transaction between 1999 and 2002.

’’It must be said that Barclays in Africa has form. Of course, we know all about its record in South Africa under the apartheid regime,’’ said Liberal Democrat MP Norman Lamb (North Norfolk).

He added: ’’What is not so widely known, however, is that Barclays provided the finance for the sale by BAE Systems of a military air traffic control system to one of the world’s poorest countries, Tanzania.’’

There have been serious questions raised on why Barclays bank, as a commercial lender, saw fit to heavily subsidise an arms sale to a highly indebted developing country like Tanzania in 2002.

Critics say former president Mkapa’s government could not have afforded the radar without the loan from Barclays, which is a commercial bank.

However, as a condition of debt relief, Tanzania had at the time agreed with the International Monetary Fund (IMF) that it would not borrow money from commercial banks.

In order to persuade the IMF to allow this loan to Tanzania, Barclays Bank reportedly declared that over a third of it was to be considered a grant.

Lamb, who has long been a fierce critic of the Tanzanian radar deal, noted that the UK´s Serious Fraud Office (SFO) was currently investigating the transaction.

’’Barclays provided the loan finance (to Tanzania) at a time when all the allegations were in the public domain and concerns were being raised that it was a dodgy deal,’’ said Lamb.

The purpose of the British House of Commons debate was to discuss sanctions against Zimbabwean President Robert Mugabe’s regime, and the role of British companies in that country - particularly Barclays Bank.

However, the focal point of the parliamentary discussion ultimately zeroed in on the Tanzanian radar deal, in which Barclays Bank played a prominent role.

Noting that newspaper reports from the previous year suggested Barclays was helping to ’’bankroll Mugabe’s regime,’’ Lamb added that the same bank was also involved in financing the dubious Tanzanian radar purchase despite widespread public criticism against the transaction.

’’How can Barclays Bank, a British-based company, act in a way that is apparently in flagrant breach of the sanctions regime?’’ the MP asked, in reference to the bank’s Zimbabwe operations.

Lamb said the UK Foreign Office had informed him that it was investigating a possible breach by Barclays on the Zimbabwe sanctions regime, and demanded to know the current progress of the probe.

Contributing to the discussion, the Labour MP for Vauxhall Constituency, Kate Hoey, said: ’’I congratulate (Lamb) on his speech, on securing this debate, and particularly on the very interesting points that he made about Barclays, which I think we all found of great interest.’’

Conservative lawmaker Richard Benyon (Newbury) said: ’’If Barclays has questions to answer, it must do so but in the context of all the organizations and governments who are complicit in the situation in Zimbabwe, many other villains also need to be held to account.’’

Jeff Ennis, the MP for Barnsley, East and Mexborough Constituencies (Labour) said: ’’I share the concern of (Lamb) about the role played by three British banks - particularly Barclays Bank, which he named - that appear to be assisting the Mugabe regime. I hope that they will review their business activities in Zimbabwe once they have read this debate.’’

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