INAUGURAL SPEECH BY DEPUTY MINISTER FOR
FINANCE DR. FESTUS B. LIMBU (MP) TO SEMINAR ON
CORPORATE GOVERNANCE AND DEVELOPMENT OF
APPROPRIATE NATIONAL CORPORATE CODES
Chairman of the session,
NBAA Chairman,
IFAC Deputy President,
ECSAFA President,
Resource Persons,
Distinguished Participants and Guests,
Seminar Organisers,
Ladies and Gentlemen.
I feel greatly honoured to inaugurate this important
seminar on the very topical theme Governance.
Mr. Chairman, Foremostly, let me extend a warm
welcome to all participants to this great event. My very
special welcome go to our foreign delegates. You are
welcome to the Haven of Peace the city of Dar-es-Salaam
and our peaceful country Tanzania. We feel privileged to
have among ourselves Mr. Rene Ricol (of France), the
current Deputy President of the International Federation of
Accountants (IFAC), the whole leadership of the Eastern,
Central and Southern African
Federation of Accountants (ECSAFA) including Mr. Daryl
Benecke (of Zimbabwe), the President, Mr. George Egaddu
(of Uganda), the Deputy President, Mr. Ram Doyal (of
Mauritius) the Treasurer and Mr. Ndung’u Gathinji the Chief
Executive Officer.
Mr. Chairman, I am informed that in few days to come,
there is going to be a change of leadership both at the IFAC
and at the ECSAFA and that we are privileged to be with us
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today the future presidents of these institutions. Mr. George
Egaddu will take over the ECSAFA presidency from Mr.
Benecke during the ECSAFA council meeting to take place
on the 2nd November,2002 at the Paradise Hotel in
Bagamoyo, another historical town in Tanzania. Mr. Ricol, I
am told, will be ascending to the IFAC’s presidency during
the forthcoming IFAC council meeting to be held on the 17th
and 18th November 2002 in Hong Kong. It is my pleasure on
your behalf to congratulate them for their anticipated high
office positions and wish them a very successful tenureship.
Mr. Chairman, The objective of this seminar is to equip
the seminar participants with tools of enhancing financial
management and accountability in the public sector as part
and parcel of strengthening good governance. As you know,
good corporate governance, or good governance, is
essential for all successful organizations whether public or
private. Corporate governance centres on how organizations
are directed, controlled and held to account. It is therefore
important that corporate governance be underpinned by
principles of openness, integrity and accountability. These
fundamentals are key for building effective organizations that
get the trust of the public at large.
For more than a decade now good governance
practices has been recognized as necessary for the good
and effictive running of organisations by many developing
nations as well as our development partners inclusive of the
World Bank, International Monetary Fund (IMF), United
Nations etc. Although governance issues are crosscutting,
yet they may vary across-countries. Experience has shown
that there are certain key areas that need to be addressed in
order to foster good governance in the public as well as
private sectors. Need less to say, the basic and major
underlying element that unites all these areas is the issue of
transparency.
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Effective delivery of services to the public demands the
existence of a conducive and facilitative environment. These
encompasses policy making, regulation, administration,
enforcement, planning and service delivery.
For
governments to attain economic efficiency and sustainable
growth, the environment need to be responsive to the needs
of the public and be transparent in its delivery. One way
of ensuring this
transparency is to advocate and ensure compliance to good
governance principles especially within the financial
management area. Transparency in the conduct of business
inevitably leads to the reduction of corrupt practices, which
accounts for efficient and effective service delivery.
Mr. Chairman, Openness, objectivity, integrity, honesty
and accountability are necessary ingredients of effective
governance. The public servants deserve to demand it. The
higher authorities including accounting officers and other
senior public officers/managers are expected to conduct
themselves in accordance with highest standards of
behaviour as role models to others. It goes without saying
that all staff are entitled to be treated by their managers and
colleagues fairly, transparently, honestly, courteously and
considerately.
Mr. Chairman, For any institution, be it a public or
private, to be able to practice good governance, it need to
have in place: appropriate legal framework
 proper
organizational
structures
and
processes
 proper governance framework
 Standards of behaviour
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These four pillars are crucial for any meaningful
implementation of good governance in any country. Yet,
having the four pillars alone is not enough. They should
be
applied and generally be integrated in the normal procedures
and practices of an entity. And of course, it have to be
incorporated within the management culture and be part of
the decision making process.
Mr. Chairman, most developing countries, Tanzania
alike, have some outdated legislation in force. Obviously this
might not be conducive for the adoption of good governance
principles. Standards of behaviour of the majority leaves
much to be desired.
Apart from all these constraints, the government on its
part have demonstrated a clear commitment to improve
financial management of our scarce resources. Of recent
past, the Government in its efforts to foster greater and
effective financial management enacted the Public Finance
and Public Procurement Acts, together with their related
regulations. The main challenge for the Government now is
to ensure the enforcement of the new laws and to build
capacity on sustainable basis at all levels.
Efforts in promoting greater transparency and
accountability, propelled the third phase government to find it
fit to establish a full-fledged Ministry under the auspices of
the Presidents office to deal specifically with governance
issues. This clearly demonstrates the political commitment of
the current government in promoting good governance in its
day to day operations such that good governance becomes
part of the culture and practice in the country particularly in
the public sector.
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Mr. Chairman, Public sector organizations need
effective structures to ensure proper accountability, clear
communication with stakeholders and clarity about roles and
responsibilities. Proper accountability entails being
accountable to the public for public money and resources
including reporting on the performance of the organization in
relation to clear defined objectives.
It is important also communication with stakeholders
(e.g. the public, staff, parliament, suppliers, recipients of
services supplied) to be open, honest, transparent, timely
and relevant to the stakeholders’ interests.
Mr. Chairman, improvements in the management and
administration of government are essential if the global
efforts to halt corruption and other types of irregularities are
to achieve desired results. This means that the rules and
systems of financial accountability, record keeping,
accounting and reporting, internal control and internal
auditing have to be well defined.
Without an integrated accountability framework or
defined measurable performance indicators to determine
objectively whether financial records are maintained and
managed effectively, financial and other records may be
unreliable, incomplete and difficult to use. All these serves
to create opportunities for fraud, graft, inefficiency and waste
which also leads to loss of revenue and impedes economic
and fiscal planning.
Mr. Chairman, the reputation of an organization also
depends on the standards of behaviour of everyone within
that organization, whether they are senior managers, staff or
agents contracted by it.
Effective procedures and
safeguards should therefore be put in place to ensure that all
management and staff are committed to the highest
standards of behaviour. These rules of the game should
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enable all public servants to conduct themselves in
accordance with high standards of behaviour and ethics to
maintain the organisation’s good reputation.
Mr. Chairman, Poverty is among the main obstacles to
the fight against corruption. As such corruption further
intensifies poverty.
The poverty under reference is attributed by:


Lack of income and assets (human, natural, physical)
Powerlessness of the poor people
Vulnerability to adverse shocks – inability to cope with
shocks
The status of poverty in Tanzania has been reported in
the results of various surveys, mainly the Household Budget
Survey (HBS), the Integrated Labour Force Survey (ILFS)
etc. According to the HBS 1991/1992, about 48.4% of the
total population are considered to be poor, with their
consumption expenditure being below basic needs poverty
line.
Mr. Chairman, a growing economy offers opportunities
for the poor to earn a decent income if and only if growth is
also widely spread and occurs in those sectors upon which
the poor depends the most. In case of Tanzania, this should
be the agricultural sector. Our country’s efforts to restore
economic growth and productivity, have resulted into positive
macro economic indicators even though overall the
economic outlook would appear bleak.
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If the targets contained in the Poverty Reduction
Strategy for reducing poverty and improving service delivery
are to be achieved, efforts to strengthen systems of
governance must remain at the centre of the GOT reform
agenda. In this regard no stone should be left unturn in
fighting corruption, abuse of power and the use of public
office for private gain, and other types of irregularities in
public administration and governance.
Mr. Chairman, it is clear that the government has a role
to play in providing overall expertise on good governance
practices that reduce or control corruption levels effectively,
based on knowledge of international best practices and
experience.
Need less to say, the government need to develop and
enhance the mechanism to monitor the practice of
accounting and auditing in the public sector. This will include
training as well as other capacity building activities to
strengthen major public watchdogs: the Parliamentary
Accounts Committee (PAC), Public Investment Committee
(PIC) and the Local Authorities Accounts Committee (LAAC),
transparency and the rule of law.
Mr. Chairman, Despite of endless indulgence in putting
in place an effective good governance in many developing
countries inclusive of Tanzania there remains big challenges
ahead:-

There is a shortage of skills and lack of familiarity with
board
of
directors’
functions
and
fiduciary
responsibilities
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
Lack of transparency
allocation.
Intra-group
resources

The lack of enforcement of existing
measures has contributed to poor
governance
regulatory
corporate

Regulatory policy has been created for competition but
implementation and enforcement have been hampered
by the limited understanding of the rules of competition
and regulatory reform and by weak institutional
capabilities.
in
Mr. Chairman, The Government recognises that for
long term plans to be successful and lead to growth and
stability, while ensuring good governance, there is need to
ensure that there is an effective accountability mechanism in
place. These cannot be enforced without transparency and
the rule of law. In this recognition the government has
implemented the Accountability, Transparency and Integrity
Project (ATIP) to support the implementation of its strategic
framework for good governance by:




Strengthening the legal and judicial systems
Enhancing public financial accountability
Strengthening oversight and watchdog institutions
(OWIS) and
Program
management
and
coordination
of
government’s
programs
aimed
at
enhancing
transparency and integrity.
Mr. Chairman, NBAA, by having the statutory mandate to
develop and regulate the accounting profession in the
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country, has a financial accountability role within ATIP. This
will lead to a necessity to strengthen the capacity of NBAA
as well as relevant parliamentary committees to enhance
their ability of regulating and overseeing the accounting and
auditing functions in the country.
Mr. Chairman, in Tanzania there is a shortage of
qualified accountants. Demand for qualified accountants
exceeds the current supply by a significant margin in both
the public and private sectors. Unfortunately, very few
private institutions if any do train their own professional such
as Accountants in Tanzania. This seem to be a business
almost solely left to Government and its institutions.
However, this is not an excuse. The GOT is working very
hard to ensure that all the accountants in the public sector
are qualified as required by law so as to enhance good
governance.
We are all aware that, as accountants, professionals in
the member bodies of the Eastern, Central and Southern
Africa Federation of Accountants (ECSAFA) are particularly
concerned about the way that organizations manage their
affairs whether they work in the private or public sectors.
They expect their organizations to uphold the highest
standards of accountability, openness and integrity.
Mr. Chairman, May I conclude once again by thanking
the organizers of this seminar. Let me emphasize that, the
future of our countries demands accountants and all other
professionals to ensure good governance through enhancing
financial management and accountability and ultimately
reduce corruption and thus implicitly address poverty.
We have to put in place codes of conduct, which will reflect
the three fundamental principles of openness, integrity and
accountability. These should also address:
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


Honesty
Objectivity and
Openness and relationships.
Public servants as well as private sector operators
should not offer or accept any payment, bribe, favour or
inducement.
As I said earlier, it is in this area that accountants and
financial analyst should play a leading role in ensuring that
they set up a modus operandi to discourage such practices.
This will ensure that the financial management and
accountability systems are sound, beneficial and sustainable
to our society. We bank on you to play your part with
diligence, integrity and honesty.
Thank you!
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