Home Youth empowerment Debate reveals irregularities in LGA empowerment funds

Debate reveals irregularities in LGA empowerment funds

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By Gadiosa Lamtey

Dar es Salaam. The inability of most local government authorities (LGAs) to disburse 10% of their budget in terms of special group loans has sparked debate among stakeholders.

Section 37A(1) of this Act requires all LGAs to set aside 10% of their budget for the financial empowerment of women, youth and persons with disabilities (PwD) groups at a ratio of 4:4:2.

But, a recent Comptroller and Auditor General (CAG) report 2020/21 revealed numerous irregularities in the management, disbursement and recovery of funds, which sparked debate among stakeholders.

The irregularities include the failure of 10 LGAs to disburse 6.68 billion shillings and the failure of 155 LGAs to recover 47.01 billion shillings in the 2020/21 financial year.

In other areas of concern, CAG Charles Kichere indicates in his report that five LGAs issued 178.61 million shillings to unqualified groups and 1.24 billion shillings were not transferred from the deposit account of eleven authorities to the WYPwD special account.

Giving his recommendations, Mr. Kichere said that non-collection of loans could deplete the revolving fund and that in order to achieve the purpose and sustainability of the fund, the previous recommendations of the CAG should be implemented.

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“Due diligence should be carried out before granting loans to special groups and more efforts should be made to recover outstanding loans from such groups, Mr. Kichere says in his report.

The CAG says that for the funds to serve the intended purpose of reducing poverty and promoting economic growth among the citizens of the groups, the loans disbursed must be recovered in accordance with the agreement.

He urged the Office of the President – Regional and Local Administrative Government (PO-Ralg) to put in place effective loan recovery measures through the involvement of loan servicing officers and to promote compliance with voluntary repayments in order to achieve fund sustainability.

Filing the Wajibu Institute of Public Accountability’s (Wapa) analysis of the CAG report on Friday, the institute’s board chair, Yona Kallagane, said the review found that the lack of a supervision resulted from poor management of the loans as well as the implementation of other projects.

He suggested that the PO-Ralg work with the regional secretariats to enforce the 2019 guidelines for the management of the WYPwD Empowerment Fund.

“This includes opening a special bank for collecting, depositing and disbursing funds. This would address the challenges in a meaningful way,” he said.

Speaking in Parliament, Mr. Festo Sanga (Makete, CCM) during the debate on the PO-Ralg budget said that the 10% loan did not benefit the targeted groups, but politicians and government employees were the main beneficiaries.

“More than 200 billion shillings have been disbursed since 2018 without benefiting young people. Unscrupulous officials and politicians have formed bogus groups which are used to siphon off council money, which is typically unfair,” he said.

Citing an example, he said the Dar es Salaam region disbursed a total of 52 billion shillings for empowerment loans to WYPwD in 2018/19, noting that 14 billion shillings were recovered and the rest went to ended up in the pockets of dishonest people.

According to him, a similar situation was recorded in the Tabora region where 5.7 billion shillings were issued to youths in the same financial year, but only 2 billion shillings were recovered.

“Minister Bashungwa [Innocent] should follow up on more than 200 billion shillings not recovered from beneficiaries to benefit loyal members of the group or could be channeled to finance the implementation of development projects such as road, water and schools” , did he declare.

Ms. Grace Tendega, Special Seats, Chadema said that the fund was disbursed to youths, women and disabled people without providing them with entrepreneurial training which is the cause of what is happening.

People with disabilities are forced to form groups to qualify for loans. Most of the time, this condition has prevented people in this group from getting loans and continuing the fight against poverty and economic empowerment,” she said.

For his part, the United Nations Association (UNA) project coordinator, Lucus Fedelis, said the lack of balance between income received by most councils and expenditure was the reason for the failure of the project. disbursement of funds for economic empowerment of special groups.

“Most of the councils located in the remote parts of the country have difficulties in terms of revenue collection, therefore, spend most of their revenue to finance recurring projects and the implementation of a few projects instead of distributing them to special groups,” he said.

On non-compliance with their loans, Mr Fedelis said the lack of financial literacy among members of most groups was another challenge as funds are instead channeled to other areas instead of the goal. foreseen. “Poor choice of implemented projects leads to failure of projects to become profitable, leading to loss and waste of secured funds,” he said.

“For example, agricultural projects that depend on the seasons and climate change as well as the lack of accurate market information have been other key factors for the failure of groups, especially young people,” he said. he adds.