The minister for Legal and Constitutional Affairs, Dr Mwigulu Nchemba, presents in Parliament on behalf of the minister for Finance and Planning some information on the proposed five-year National Development Plan (2021/2022 - 2025/26) and the State Budget for FY-2021/2022, in Dodoma yesterday. PHOTO | JONATHAN MUSSA
Dar es Salaam. The government will increase its FY- 2021/22 budget by four percent in a deliberate move to speed up the economic growth momentum as the country starts implementing its third five-year development blueprint.
The budget will rise from Sh34.88 trillion of the 2020/21 financial year to Sh36.26 trillion in FY-2021/22 which will also be the first year for the implementation of the Five-Year Development Plan 3 (FYDP III).
In a statement released by the Legal and Constitutional Affairs minister, Dr Mwigulu Nchemba, on behalf of the Finance and Planning minister in Parliament yesterday, the government says the increase will be fuelled by several factors, including amplified requirements by the consolidated fund.
“This includes [money required for] repayment of government debt; money required to cater for promotions of public servants and new jobs [in the public service],” he said.
The increase in budget will also partly cater for a rise in demand of finances by Tanzania National Parks Authority, Tanzania Wildlife Management Authority and the Ngorongoro Conservation Area Authority.
If the budget framework, which Dr Nchemba presented to Members of Parliament in the House yesterday has anything to write home about, then the government will collect Sh26.03 trillion from domestic sources during the 2021/22 financial year, rising from the Sh24.07 trillion that is earmarked for collection from domestic sources during the current financial year.
Tanzania Revenue Authority (TRA) will have to up its game and garner Sh21.47 trillion during the coming financial year. This will be Sh1.33 trillion or 6.6 percent more than the Sh20.14 trillion that is earmarked for collection during the current financial year.
Non-tax revenue – which includes all the money collected by local government authorities and tourism revenue among others – will bring a total of Sh4.56 trillion into government coffers.
Development partners will contribute Sh2.89 trillion to Tanzania’s 2021/22 revenue and expenditure plan while Sh4.99 trillion will be obtained in form of domestic loans.
The government will source a total of Sh2.35 trillion as concessional loans during the coming financial year.
Expenditure
According to the statement, out of the Sh36.26 trillion total budget, Sh23 trillion will be recurrent expenditure while Sh13.26 trillion will be directed towards development projects.
Sh10.37 trillion of development funds will be sourced locally while Sh2.89 trillion will come from foreign sources.
Out of the Sh23 trillion for recurrent expenditure, salaries of civil servants will take up Sh8.15 trillion while loans and interests will gobble a total of Sh8.88 trillion.
Sh115 trillion required
Tanzania will require a total of Sh114.8 trillion during the next five financial years to effectively implement its FYDP III.
Out of the money, Sh74.2 trillion will be sourced from the public sector while the private sector will contribute the remaining Sh40.6 trillion to the implementation of the development blueprint.
During the implementation process, various means will be used, including municipal bonds as well as through the use of public private partnerships.
The government will specifically seek to achieve three major goals during the next five years in the pursuit of the FYDP III which winds up well within the period of implementing Tanzania’s Development Vision 2025.
The Vision seeks to create a Tanzania that will be substantially developed and one with a high quality livelihood by the year 2025.
It seeks to create a Tanzania where abject poverty will be a thing of the past and where the economy will have been transformed from a low productivity agricultural economy to a semi-industrialized one led by modernized and highly productive agricultural activities which are effectively integrated and buttressed by supportive industrial and service activities in the rural and urban areas.
Towards the Vision 2025 goals, the FYDP III will specifically be built on three pillars of: good governance, economic growth and development of people. All the projected that will be implemented during the coming five years will be those that are directly linked to the realisation of the three goals.
The government painted a bullish picture with regard to the implementation of the 2nd FYDP which ends during the financial year 2020/21.
The government said during the past four years, a total of Sh67.5 trillion has been injected into the economy by both the public and the private sectors and that construction of mega development projects like Standard Gauge Railway line, construction of the 2115 Megawatts Julius Nyerere Hydropower Station and revival of Air Tanzania Company Limited were well on track.
However, a heated debate ensued later in the House, with some Members of Parliament (MPs) questioning the rationale behind injecting the lion’s share of the country’s resources into mega projects, leaving millions of Tanzanians in poverty.
“Allow me to advise the government starting with these mega projects. We have seen massive funds going towards implementing these mega projects but this has had no impact on lives of ordinary Tanzanians,” said Mr Joseph Msukuma (Geita Rural - CCM).
He said there had been an outcry by MPs that funds budgeted for the improvement of rural roads, under the Tanzania Rural and Urban Roads Agency (Tarura) were insufficient to meet the country’s requirements.
“My advice was that if we have money, we could inject it into improving rural roads and the impact would be instant because it would simplify the transporting of farmers’ harvests to markets,” he said.
Mr Msukuma noted that most businesses in the country were in a pathetic situation, asking government leaders to find a way of bailing out ailing businesses.
“Let’s not be ashamed of telling the truth. The situation of businesses is pathetic. People are closing their businesses while others are losing their capitals. I have been in business and the truth is that the situation is difficult in areas where we come from. Shops are closing and this is not a joke. Honourable Speaker, let’s find a way of changing these laws…If we keep closing our eyes to people’s predicaments, they will get bankrupt,” he said.
His Gairo counterpart on the ruling party’s ticket, Mr Ahmed Shabiby said to yield quick gains, Tanzania should have done everything possible to boost agricultural production and marketing its tourism across the world.
“The Finance ministry does not disburse irrigation funds to the Ministry of Agriculture….sunflowers cultivated in Tanzania was only enough to cater for the country’s needs for a period of three months only,” he said.
Additional reporting by Noor Shija
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