Economy Tanzania unveils $22-billion budget

Tanzania unveils $22-billion budget

Finance Minister Saada Salum Mkuya
Finance Minister Saada Salum Mkuya

The Tanzanian government on Thursday announced a national budget of nearly $22.2 billion for the 2015/16 financial year, promising to cut its dependence on foreign assistance, which currently accounts for nearly 15 percent of the budget.

“We plan to get only $1.8 billion from donors,” Finance Minister Saada Salum Mkuya told members of parliament in Dar es Salaam.

“This is about 8.4 percent of the total $22.2 billion budget,” she asserted.

The new budget exceeds last year’s by some $2.6 billion.

“Donor funds come with conditions, and sometimes they are not reliable – a trend that disrupts our plans,” Mkuya said.

“It is important to target being independent in budget funding to avoid risks in implementing development projects,” she added.

Last year, following a corruption scandal that involved public funds, Tanzania’s development partners withheld $558 million pledged earlier for the country’s 2014/15 budget.

Minister Mkuya, for her part, said the government was planning to borrow a total of $5.7 billion to finance the new budget.

She added that the government was also looking to increase revenue from domestic sources.

“To reach our expectations of a donor-free budget, the government will reduce incentives in order to collect much-needed revenue,” she said.

“The government will enhance the use of electronic fiscal devices in order to seal loopholes for revenue leakages,” the minister added.

Luhanga Mpina, chairman of parliament’s economic affairs committee, urged the government to prioritize projects.

“In previous budgets, the government came up with many project ideas that do not materialize,” he told The Anadolu Agency by phone.

“We are urging the government to select a few projects to implement, rather than come up with very many and fail when it comes to implementation,” said Mpina.

MP Jitu Soni, for his part, said the government had to invest more in processing industries, which, he asserted, would add value to goods rather than simply export raw material.

“The country will not meet its objectives by continuing to export unfinished goods,” he told AA. “We must export rather than being importers.”

Economist Patty Magubira said Tanzania’s national development would suffer as long as the local currency continued to depreciate against the U.S. dollar.

“Due to limited exports, the country has been forced to import a good number of commodities, which increases demand for dollars,” Magubira told AA.

“This is not good for developing countries like Tanzania,” the economist added.

The shilling has depreciated rapidly against the greenback since 2005, when President Jakaya Kikwete came to power.

Only four months ago, the Tanzanian shilling was trading at 1,133 to the dollar, compared to a current exchange rate of 2,025 shillings to the dollar.

Previous articleArts festival brings solace to Harare’s orphans
Next articleUS shuts Ebola treatment unit in Liberia