On January 16, Jakaya Kikwete, President of Tanzania, sacked the Governor of the Bank of Tanzania. Daudi T.S. Ballali. He was dismissed after an independent international audit exposed fraudulent transactions.

International accountancy firm Ernst & Young, carried out the audit which established that more than $120m (Frw65,000m) was improperly paid by the bank to dozens of local companies, many of them reportedly fictitious.

The audit found that 22 local companies had benefited from the payments through the bank’s external payment arrears account. President Jakaya Kikwete has ordered an investigation into all firms mentioned. Meanwhile a deputy governor, Prof. Benno Ndulu, has been named Ballali’s replacement.

Mistakes, fraud and corruption are ever present in business throughout the world.

Corruption will be the ruin of developing countries; crippling their economies as it infects the population as a whole. Corruption, rarely limited to a few dishonest individuals, becomes institutional and systemic.

Corruption erodes public confidence in political institutions and leads to contempt for the rule of law. It distorts the allocation of resources and undermines competition in the market place. Corruption cannot fail to have devastating effects on investment, growth and development.

Corruption thrives where government is weak. The same ingredients that ensure good governance – namely accountability and transparency – can also combat corruption.

Rwanda is on the move to eradicate corruption. There are two main institutions that are combating corruption.

Firstly an Ombudsmans office, or Office of the Auditor General, established in 2004, monitors transparency and compliance with regulation in all public sectors. The office submits its audit reports and findings to parliament.

Secondly, the National Tender Board regulates public procurement and tender processes.

Nevertheless, the regulation and authorisation under which companies, their directors and auditors operate ought to be enhanced so as to ensure good governance in both public and private sectors of our economy.

As Rwanda’s financial market gets underway, the central corporate governance principles of transparency and accountability are crucial to the integrity and credibility of our market system.

We already trust corporations to create jobs, generate tax revenues and provide markets with goods and services. Increasingly we make use of private sector institutions to manage our savings and secure our retirement income. It is therefore crucial that these companies are constantly under scrutiny.

Corporate structure is changing fast. Financial innovation and globalisation present new challenges to maintaining good corporate governance.

At this time of change in Rwanda, let us all vow to fight corruption.