Internal state borrowing affects currency circulation

DAILY NEWS Reporter in Dodoma

MEMBERS of Parliament (MPs) yesterday extolled the government for disbursing 101 per cent and 69 per cent of targets for recurrent and development expenditure respectively during the first quarter of the 2016/17 budget.

Meanwhile, many of those who contributed to the debate pushed for more allocation of funds to transform the agricultural sector which employs over 70 per cent of Tanzanians and wanted the government to reduce borrowing rates from internal sources in order to increase currency circulation in the country.
While debating the report by the parliamentary budget committee, the lawmakers also took the government to task to ensure that it releases funds for administration costs in all councils after it was informed that the government did not disburse any money for that purpose during that period.
Tabling the report, Deputy Chairman of the committee, Mr Josephat Kandege, said statistics indicate that the government gave 5.6 tr/- for the recurrent and development budget in the first quarter, equivalent to 92 per cent.
Out of it, 4.38tr/- (101 percent) went to the recurrent expenditure and 1.19tr/- (69 per cent) was channelled towards development budget. “The committee has noticed that although the government has exceeded the target in releasing money for recurrent budget, it did not send any funds for the councils’ administration costs,” he said.
The committee advised the government to ensure that it timely discharges funds for financing the development projects and effectively use the economic opportunities available. Debating the report, a member of the committee, Mr Cecil Mwambe, said the internal debt has been increasing because the government highly borrows from local financial institutions. “This situation is affecting the private sector, because it is competing with the government in borrowing.
For the government to borrow more from internal sources, it reduces circulation of money, and therefore affects the economy,” he argued.
Another member of the committee, Mr Juma Hamad Omar, based his argument on the importance of agriculture to the individual economy and the envisaged industrial revolution. Mr Omar said if the country wishes to boost individual income, it should consider investing more into agriculture, the sector which employs over 70 per cent of the citizens.
He argued that despite that the national income was growing, while individual earning was declining, noting that in 2014, each Tanzanian was earning over 1200/-, but last year it dropped to 966/-.
An MP for Kigoma South, Ms Hasna Mwilima (CCM), called for subsidized farm inputs in the next budget so that farmers could afford to buy them. Reacting to the concerns from the lawmakers, Deputy Minister for Agriculture, Livestock and Fisheries, Mr William Ole Nasha, said the government has a plan that would see fertiliser being produced by local industries.
“We (the ministry) have received contributions from MPs and agree that agriculture is vital to the planned industrydriven economy,” he told the Parliament.
Deputy Minister for Finance and Planning, Ms Ashatu Kijaji, said the current rate of borrowing by the government from internal sources does not affect the private sector in accessing loans.