Govt cuts by half vehicles budget
DODOMA: THE government’s 49.35tri/- budget for 2024/2025 financial year sailed through in the National Assembly on Wednesday with lawmakers giving it resounding approval.
The Speaker of the National Assembly, Dr Tulia Ackson announced that out of 381 Members of Parliament who were present on Wednesday, 362 voted in favour of the budget, which is equivalent to 92.2 per cent.
Eighteen legislators abstained from voting and no one voted against the budget, while 12 MPs were absent, Dr Tulia announced.
Five Members of Parliament from the opposition parties – Mariam Omari (ACT), Shamsi Tamba (CUF) and Nusrat Hanje, Jesca Kishoa, and Salome Makamba (all Chadema) were cheered by their fellow lawmakers for voting YES.
The government has proposed some 11.2 per cent increase in overall government spending to 49.35tri/- in the next financial year, up from 44.39tri/- in the current year.
About 70.1 per cent of the budget will be financed by domestic revenue projected to reach 34.6tri/-, where 29.4tri/- will be tax revenue and 5.2tri/- non-tax revenue.
Growth in domestic revenues will be driven by government’s strengthening of revenue collection, predominantly through encouraging the formalisation of informal businesses.
The government intends to allocate funds guided by its Five-Year Development Plan (2021/22–2025/26), with a majority of funds going to local elections to be held this year and general elections next year.
The big chunk of funds will also be used in servicing of governments debts and rehabilitation and construction of new stadium as the country prepares to co-host the Africa Cup of Nations in 2027.
Earlier, the Minister for Finance Dr Mwigulu Nchemba had announced a number of costs cutting measures, following concerns raised by Members of Parliament during the budget debate.
He said the government will cut down by half the budget for buying motor vehicles in the new 2024/2025 budget as part of wide-ranging cost cutting measures following concerns raised by Members of Parliament.
He said he had directed the Paymaster General to slash for more than 50 per cent about 129bn/- allocated for buying motor vehicles in the new budget and direct the money to another needy areas.
“I have directed the Paymaster General to slash for more than 50 per cent funds allocated for buying motor vehicles and the money should be directed to another needy area.
The minister said the same would apply to the budget for maintenance and repairs of government vehicles which is about 67bn/- and the budget for fuel that will each be cut by a half and the money be directed to roads and water projects.
Also read: Zanzibar’s 5.1tri/- budget sails through
National debt
Dr Nchemba said the national debt that has increased to 91.7tri/- up to March 2024 is sustainable according to international ratings agencies.
Moody’s Analytics upgraded Tanzania’s credit rating from B2 to “B1 with a stable outlook” in March 2024 signaling – in part – the agency’s confidence about the country’s improved business environment, and viewed as a stamp of approval for President Samia Suluhu Hassan’s probusiness agenda.
The minister said Tanzania was seeking loans to finance strategic energy and transport infrastructure development such as construction of the standard gauge railway. He said Tanzania was also seeking loans not because it is a poor country but because it was rich and could be trusted by international lenders.
“The richest (country) in the world has the largest debt,” said the minister adding the ten leading economies have the largest loans.
The US, the richest nation in the world in terms of GDP, leads the world with the highest debt close to 70 trillion US dollars followed by China, the second richest whose debt is total debt is around 47.5 trillion US dollars.
The minister said there would be no day a Tanzanian would be asked to pay government loans as some corrupt politicians claim.
CNG conversion
Minister Nchemba said the government was going to lead by example by converting its vehicles to run on gas.
“The government is going to be a model on use of vehicles that run on gas… on use of natural gas on vehicles we are going to be a model,” he said.
He said the government would also open CNG fueling stations in Morogoro and Dodoma and more in other regions.
The minister said he had instructed the OC budget by 20 per cent and the money to be channeled to the CNG subsector.
US dollar scarcity:
Minister Nchemba said the government will employ various strategies to improve access of the US dollars.
He said foreign currencies and US dollars in particular is obtained through exports, loans and grants. The government has increased investments productive sectors to boost exports.
He said he was also optimistic that access of US dollars would improve in the new financial year as the Julius Nyerere Hydropower Plant (JNHPP), the biggest hydropower station in Tanzania, nears completion.
The cost of implementing the JNHPP project, which is expected to generate 2,115 megawatts of electricity, is 6.5tri/- (about 3.9 billion US dollars).
The minister said other measures to address the problem of US dollar scarcity will include to enforcing Bank of Tanzania Act section 26, which provides that Tanzanian Shilling is the only legal tender.
The government will come up with regulations and punishment for those who will go against the law.
