Govt admits it’s broke as development projects stall

We are fighting, we are struggling, we send money where we can at that small rate of five per cent of development money but we have been operating on our own money”  Finance Minister Saada Mkuya 

By The Citizen Reporter

Posted  Monday, February 2   2015 at  08:16

In Summary

• Finance minister Saada Mkuya says the government has largely been depending on TRA collections to run its affairs for the past six months
• Parliamentary committees and MPs have confirmed that many development projects have stalled due to a cash shortage

Dodoma. The government has admitted that it has been operating on a shoestring budget for the past six months.

Parliamentary committee reports and MPs have confirmed that many development projects have stalled due to a shortage of funds.

Finance minister Saada Mkuya said on Saturday that the government has largely been depending on Tanzania Revenue Authority (TRA) collections to run its affairs for the past six months.

However, averaging Sh800 billion monthly, the collections are only enough to meet first charges account which involves salaries and servicing national debt, leaving other expenditures in limbo.

Numerous reports tabled by parliamentary committees last week indicate only one thing – the government has failed to finance development activities.

In their contributions, numerous MPs hammered on the reality of the situation by complaining that government has not released funds for development projects in their constituencies.

Ms Mkuya finally admitted on Saturday that government finances were in serious trouble.

It was apparent that the decision by donors to withhold their general budget support of nearly Sh1 trillion pending the outcome of the Tegeta Escrow account scandal has affected the government’s fiscal plans.

“In the past six months, the government has continued to work on the little it collects from its own sources. It is this small amount we have also struggled to disburse for development activities. But in this last six months, the government has continued to depend on its own collections.

“We are fighting, we are struggling, we send money where we can at that small rate of five per cent of development money but we have been operating on our own cash,” said Ms Mkuya when responding to the views of MPs and House committees.

Ms Mkuya argued that what happened during the first six months of this financial year should serve as a lesson to Tanzanians that they need to do away with donor dependency in managing the national budget.

First hints that the government was in a precarious financial state were dropped by the Budget Committee, whose annual report noted that financing development budget has been problematic.