Dar reduces donor dependency

Written by ALVAR MWAKYUSA

The Minister for Finance and Economic Affairs, Ms Saada Mkuya Salum.

FINANCE Minister Saada Mkuya Salum unveiled projections for revenue collections and expenditures for the 2015/2016 fiscal year in which the government seeks to trim donor dependency from 14.8 to 8.4 per cent.

Presenting the highlights to parliamentarians in Dar es Salaam, the minister said the government expects to receive 1.888trl/- from donors next financial year down from 2.941trl/- pledged by development partners this year.

To meet the reliance target, Ms Mkuya said the government will strengthen internal revenue collections to 15.7 per cent of the Gross Domestic Product (GDP) towards achieving a growth rate of 7.2 per cent.

Minister Mkuya, who will be presenting her second and last budget as finance minister in the fourth phase government in June, this year, said the financial plan for next year’s financial year will be 22.480trl/- from 19.853trl/- during the current year, an increase of 13.24 per cent.

“The government plans to spend 16.711trl/- on recurrent expenditure and 5.769trl/- on development vote. Of the development spending, 75 per cent of the funds, translating to 4.327trl/- will be sourced locally,” the minister explained.

The 2015/2016 budget is the closing financial plan for the fourth phase government under President Jakaya Kikwete who came into power in 2005.

It is also the last budget for the 2010/2011 to 2015/2016 Five-Year Development Plan unveiled in 2010.

In the next year, the government plans to collect 14.824trl/-, including 13,353trl/- in taxes while non-revenue and collections from local government authorities have been pegged at 949.2bn/- and 521.9bn/-, respectively.

According to the minister, the government will also borrow 5.567trl/- in commercial loans to implement the budget.

As of March, this year, Ms Mkuya noted, revenue collections stood at 8.184trl/-, representing 87 per cent of the target while development partners dished out only 1.583trl/- out of the 2.941trl/- they had pledged.

During the same period, the national debt soared to US $19.5 million dollars (about 35trl-) from US $18.7 million dollars (about 30trl/-) during the same period last year.

“The increment was due to new soft loans and commercial loans as well as accumulated interests from external debts of countries which are not members of the Paris Club.

“The funds were used in implementation of development projects such as roads, energy, transport, education and water.

According to international criteria the debt is still on sustainable levels,” the minister stated. However, some MPs had reservations for the plans announced by Minister Mkuya, given the fact that the previous projections by the state to collect revenues have not been made and thus leading to budget deficit.

“It is also sad that the government has indicated it will spend more during the next fiscal year and yet it has failed to implement previous budgets,” the Chairman of the Parliamentary Budget Committee, Dr Festus Limbu, told journalists after the minister had presented the estimates.

The veteran politician expressed concern as well that only a fraction of funds allocated for development projects and other charges have been disbursed and thus leading to stalling of development projects.

He complained further that his committee and the private sector were not fully involved in formulation of the financial plan. On his part, the Chairman of Parliamentary Committee on Economy, Industry and Trade, Mr Luhaga Mpina, was skeptic over implementation of the budget.

“We need more explanation from the government on how we are going to reduce donor dependence and yet we have failed to meet the target of revenue collection,” the vocal MP charged.

Earlier, the Minister of State in President’s Office (Relations and Coordination), Dr Mary Nagu, said expenditure for the next fiscal year will mainly dwell on the improvement of infrastructure namely railway lines, road networks, ports as well as energy, water and information and communication technology (ICT).