20110524
Reuters
DAR ES SALAAM (Reuters) - Two businessmen have been jailed for defrauding Tanzania's central bank of over $1 million in the first of a series of cases on scams on the bank that cost the country $87 million in 2005, their lawyer said on Tuesday.

Prosecutors in east Africa's second biggest economy are investigating one of the country's biggest corruption scandals comprising of about 20 separate cases of suspected fraud.

Tanzanian President Jakaya Kikwete sacked central bank governor Daudi Ballali in 2008 after a special audit into the payments uncovered the massive fraud and graft.

A corruption investigation ordered by Kikwete after the audit findings led to a string of prosecutions against high-profile businessmen and central bank officials.

"I can confirm that our clients were sentenced to five years in prison each, we intend to issue a notice of appeal against the judgment," Majura Magafu, lawyer for businessmen Farijala Hussein and Rajab Maranda, told Reuters.

They were found guilty of forgery and obtaining money by false pretences among other charges.

Critics of Tanzania's anti-corruption fight have accused the government of selective justice after failing to prosecute individuals linked to the ruling Chama Cha Mapinduzi (CCM) party over the same scandal.

Donors slashed funding pledges for Tanzania's 2010/11 budget by nearly a quarter of a billion dollars due to concerns about corruption and the slow pace of reforms in the country, which relies heavily on financial assistance.

Leaked U.S. cables from its embassy in Dar es Salaam said Tanzania's anti-corruption chief feared for his life and believed lack of political will was undermining the fight against corruption in the country.

The rest of those facing charges are other high-profile businessmen and former central bank officials.