49.35TRI/- BUDGET: Where focus lies

DODOMA: THE government expects to spend 49.35tri/- in the next financial year (2024/25) on both recurrent and development expenditures, with a focus on the local government polls, the General Election and preparations for the 2027 Africa Cup of Nations (AFCON) tournaments.

The Minister for Finance, Dr Mwigulu Nchemba, informed Members of Parliament (MPs) yesterday that the national budget for the next fiscal year has been increased by 11.2 per cent compared to the 44.4tri/- approved during the 2023/24 financial year.

He released the budget proposal during a special meeting for all MPs, highlighting the budget ceilings for the financial year 2024/25.

According to Dr Nchemba, revenue collected by the Tanzania Revenue Authority (TRA) is expected to reach a total of 29.9tri/-, while tax and non-tax revenue from ministries, state-owned entities and independent departments amount to 3.4tri/-.

Local Government Authorities (LGAs) are expected to collect revenue totalling 1.3tri/-. Of the total budget, the finance minister noted that 33.6tri/- are allocated for recurrent expenditures and the remaining 15.8tri/- are for development expenditures (equivalent to 3.8 per cent).

“Development funds include development subsidies totalling 1.2tri/- that will be spent on financing loans for students of higher learning institutions, as well as the programme for free basic education from primary to secondary level,’’ he said. Grants and concessional loans from development partners will account for 5.13tri/- .

The government also expects to borrow 6.6tri/- from the internal market, while another 4.02tri/- will be spent on servicing treasury bills and government bonds and 2.6tri/- will be spent on development projects.

“The government also expects to borrow 3tri/- from the foreign market, which will be spent on implementing various infrastructure projects,” said Dr Nchemba.

“The government will ensure that all loans acquired are channeled to flagship projects that bring quick wins and a multiplier effect, including widening the base for employment and revenue, as well as ensuring that the projects are expedited and completed on time,” he added.

The minister further added that part of the government spending in the next fiscal year will be directed towards servicing government debt, paying salaries for public servants, the 2024 local government elections and preparations for next year’s General Election.

Other spending will go towards footing bills for civil claims, as well as the construction of football stadia as the country prepares to host the 2027 Africa Cup of Nations (AFCON).

Tanzania is expected to host the AFCON tournaments along with neighbouring Kenya and Uganda. Regarding economic growth, Dr Nchemba said the main focus in 2024/25 will be to increase the pace of the country’s Gross Domestic Product (GDP) growth to at least 5.4 per cent in 2024, up from the 5.2 per cent projection set in 2023.

Other goals include controlling inflation by maintaining a single-digit average between 3 and 5 per cent, increasing internal revenue to 15.7 per cent of the GDP in 2024/25 compared to the 2023/24 projections of 15.3 per cent.

“Tax revenue is expected to increase by 12.8 per cent of the GDP from 12.5 per cent during 2023/24, and the government plans to have forex reserves capable of covering imports and services from outside the country for at least four months,” said the minister.

According to the minister, the 2024/25 budget outlook considers revenue collection trends, economic growth expectations, the state of the global economy, and the various strategies the government is undertaking to increase internal revenue sources.

Dr Nchemba also stated that the budget proposals for 2024/25 were made considering the state of the economy, aiming to increase private sector participation in business and investment activities, as well as strengthening the local content policy in all government-funded projects.

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