Booster shot for growth

  • A breakdown of the 49.35tri/- 2024/25 budget
  • President Samia follows live budget speech

DODOMA: PRESIDENT Dr Samia Suluhu Hassan watched live from Chamwino State House in Dodoma as Finance Minister Dr Mwigulu Nchemba presented a government budget of 49.35tri/- for the 2024/2025 financial year in the National Assembly on Thursday.

The President’s gesture underscored her strong desire to steer the nation to greater heights. This was President Samia’s third budget since assuming the presidency in March 2021. Sitting on her presidential seat, the Head of State wore a broad smile as the finance minister mastered the podium, highlighting tremendous achievements recorded in the implementation of previous budgets while painting a promising picture for the future.

Earlier , Minister of State in the President’s Office (Planning and Investment), Professor Kitila Mkumbo, outlined 10 priority areas for the upcoming financial years.

Finance Minister Dr Nchemba reciprocated in the evening by elaborating on how the government plans to secure the necessary funds to finance the national development plan and providing a breakdown of expenditures for the 2024/2025 financial year.

“For the year 2024/25, the government expects to mobilise and spend a total of 49.35tri/-, equivalent to an increase of 11.2 per cent compared to the 2023/24 budget,” Dr Nchemba told the August House.

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Domestic revenue is projected to be 34.61tri/-, equivalent to 70.1 per cent of the total budget and 15.7 per cent of GDP, the minister said, revealing that out of the projected amount, the Tanzania Revenue Authority (TRA) has been tasked to collect 29.41tri/- while 3.84tri/- will be non-tax revenue to be collected by ministries, agencies, and independent departments. Local Government Authorities (LGAs) have been given the task to collect 1.36tri/-, whilst the government expects to secure 5.13tri/- from Development Partners as grants and concessional loans.

Dr Nchemba told the Parliament that the government estimates to borrow 6.62tri/- from the domestic market, of which 4.02tri/- will be for rolling over of maturing Government Treasury Bills and Bonds, and 2.60tri/- for financing development projects.

“In addition, the government estimates to borrow 2.99tri/- from external commercial sources for financing development projects,” he added.

Key priority areas of the budget include; completing flagship and strategic projects; strengthening production sectors; enhancing human capital development particularly in social services; increasing the use of ICT; and improving the business environment and investment.

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The budget will also finance wage bill, government debt, 2024 Local Government Election, preparations of the 2025 General Election, the preparation of the National Development Vision 2050, and preparation of the 2027 Africa Cup of Nations (AFCON 2027), including the construction and rehabilitation of stadiums.

The ongoing projects that will be implemented in the next financial year are: Julius Nyerere Hydroelectric Power Project 2,115MW; construction of Standard Gauge Railway (SGR); revamping of ATCL; East African Crude Oil Pipeline (EACOP) from Hoima (Uganda) to Tanga (Tanzania); construction of bridges and flyovers including Kigongo-Busisi Bridge; construction of Kilwa Fishing Harbour and procurement of fishing vessels; and construction of Mkulazi sugar processing plant.

Other projects include: Construction of Ruhudji Hydropower Project – 358 MW; construction of Rumakali Hydropower Project – 222 MW; construction of Liquified Natural Gas Plant (LNG) – Lindi; Engaruka Basin Soda-Ash Project-; and Mchuchuma and Liganga projects.

Giving expenditure breakdown, Dr Nchemba said the government will spend 15.74tri/- for servicing public debt and other consolidated fund expenses; 11.77tri/- for salaries, including recruitment and promotion of employees; and 2.17tri/- for railway, roads, water and REA projects.

The government will spend a total of 1.19tri/- to finance higher learning education and tertiary colleges student loans, and the Fee Free Primary and Secondary Education Programme.

He said the government will continue to implement the Alternative Project Financing Strategy to widen the scope of funding development projects and reduce dependence on the government budget.

“A notable example of the implementation of this strategy is the successful issuing of a Green Bond worth 53.1 billion shillings by Tanga Urban Water Supply and Sanitation Authority (TANGA UWASA),” said Dr Nchemba.

ALSO READ: ‘It should be people-centred budget’

The minister warned against misuse of public funds, vowing disciplinary measures against Accounting Officers who will not comply with the laws governing the control and management of public funds.

Dr Nchemba directed Accounting Officers to ensure the use of the National e-Procurement System of Tanzania (NeST) in all procurements of goods, services and contracts while considering market price.

“I warn those who misuse public funds, to stop that habit immediately! Those who will be liable, legal action will be taken against them,” swore the minister.

Dr Nchemba revealed that the overall macro-economic targets are to accelerate growth rate of the Gross Domestic Product (GDP) to 5.4 per cent in 2024 from 5.1percent in 2023; to control inflation rate and ensure it remains within the single-digit range of an average of 3.0-5.0 per cent in the medium term and to increase domestic revenue to 15.8 per cent of GDP in 2024/25 compared to the projection of 15.4 per cent in 2023/24.

Other micro-economic targets are to increase tax revenue to 12.9 per cent of GDP in 2024/25 from the target of 12.6 per cent in 2023/24; to maintain a budget deficit (including grants) not exceeding 3.0 per cent of GDP; and to maintain foreign exchange reserves sufficient to cover the importation of goods and services for a period of no less than four (4) months.

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