Finance and Planning minister Phillip Mpango presents the 2021/22 Budget Framework before MPs in Dodoma yesterday. PHOTO | CORRESPONDENT
Dar es Salaam. The government will raise its 2021/22 budget by only about four percent as it seeks to strike a balance between the stability of the economy and investment in ongoing mega development projects.
Presenting the budget framework to Members of Parliament (MPs) in Dodoma yesterday, Finance and Planning minister, Dr Phillip Mpango pegged the 2021/22 budget at Sh36.23 trillion.
This will be only Sh1.35 trillion more than the Sh34.88 trillion that the parliament approved last year for Tanzania’s recurrent and development expenditure for the financial year 2020/21
Out of the money Sh25.17 trillion will be sourced locally, with Tanzania Revenue Authority (TRA) having to collect Sh22 trillion while Sh3 trillion will be sourced as non-tax revenue.
Local government authorities will collect Sh864 billion while development partners will avail Sh2.9 trillion in grants and concessional loans.
The government will source another Sh7.34 trillion in form of domestic and foreign loans.
A total of Sh23 trillion will be recurrent expenditure while Sh13.256 trillion will be spent on development projects. It is envisaged that locally-sourced funds will account for Sh10 trillion of the Sh13 trillion development budget.
“It is the government’s view that implementation of the 2021/22 development plan and the 2021/22 budget will stimulate economic growth, improve delivery of social services, create job opportunities as well as development for people and the nation at large,” he said.
Strategic projects
The government, according to Dr Mpango, will channel much of the development budget on executing the ongoing priority projects before embarking on new ones.
Some of the mega projects that will consume the lion’s share of the government’s development budget in the coming financial year include: the Julius Nyerere Hydropower Station which is currently being built at the Rufiji River, ongoing construction of the Standard Gauge Railway (SGR) and the purchase of aircrafts for Air Tanzania Company Limited (ATCL).
Dr Mpango told the legislators that a total of Sh3.19 trillion of locally-sourced funds will be spent on the ongoing SGR project while Sh1.5 trillion (of locally-sourced funds) will be spent building passenger terminals as well as payment of debts and purchasing of more aircraft for ATCL. The Julius Nyerere Hydropower Station will consume another Sh1.34 trillion of locally-sourced funds during the coming financial year period.
Ministers, MPs and govern[1]ment officials attend the presentation of the 2021/22 Budget Framework by Finance and Planning minister Philip Mpango in Dodoma yes[1]terday. PHOTO | CORRESPONDENT
Special importance will be attached to the use of Information and Communication Technology (ICT) in the conduct of government businesses in order to improve efficiency and build the capacity of local experts in the management of cyber security systems.
The government will also conduct audits and pay its debts to prevent the accumulation of interests on the loans.
Economic growth
Dr Mpango told Members of Parliament that so far Tanzania’s economy was progressing well despite impacts of the Covid-19 pandemic which weakened then global economy last year.
Tanzania’s Gross Domestic Product (GDP) grew by 4.7 percent during the period from January to September 2020. This was lower than an average growth rate of 7.3 percent which was registered during a similar period in 2019.
The government attributes the retarded growth rate to floods and Covid-19 impacts among others.
“The slowdown in growth rate has been caused by heavy rains which resulted in floods that destroyed transport infrastructure. It has also been caused by delays in execution of some development projects due to the Covid-19 pandemic which had extended across many countries that are Tanzania’s trading partners,” he said.
Despite the somewhat lower growth rates, Dr Mpango said, Tanzania remained one of the country’s that will have positive growth rates because the government decided not to apply lockdowns as a way of containing spread of the Covid-19 pandemic.
The target for 2021 is that the GDP should grow at a rate of six percent and that growth should speed up to 6.3 percent in the year 2023. Inflation will also be contained to below five percent throughout the year 2021. The country envisages to have foreign exchange reserves that are sufficient to cover for the bill of imports for a period of not less than four months.
Lowering poverty
He said a study that was conducted by the National Bureau of Statistics (NBS) in partnership with Repoa has established that poverty levels in Tanzania were going down by an average of 0.23 percent per year.
This suggests that the population living below the poverty line has gone down from 26.4 percent in 2018 to 25.7 percent in 2020, Dr Mpango told MPs.
In terms of food, Dr Mpango said while Tanzania’s requirements stood at 14.4 million tonnes, the country had produced 18.2 million tonnes, suggesting that the country had a total of 3.8 million tonnes in surplus cereals and non-cereals.
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