Government sets aside 800bn/- to clear arrears
DODOMA: THE government has allocated 800bn/- in the 2026/27 financial year for the payment of verified arrears owed to contractors, suppliers and public servants, in a move aimed at clearing outstanding obligations and improving cash flow in the economy.
Deputy Minister for Finance, Mr Mshamu Munde, told the National Assembly yesterday that the allocation forms part of ongoing efforts to systematically settle verified domestic arrears while strengthening fiscal discipline across public institutions.
“The Ministry has continued to prioritise debt repayment. In the 2025/26 financial year, 700bn/- was set aside for the settlement of arrears, out of which 477.6bn/- had already been disbursed by February 2026,” he said.
Mr Munde said the government is also tightening controls to prevent the accumulation of new debts through stricter budget planning and enforcement of financial regulations.
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He said accounting officers have been directed to ensure funds for arrears are included in annual budgets, public financial management systems are fully utilised to monitor expenditure, and no procurement is initiated without confirmation of available funds.
In a supplementary question, Lucy Mwakyembe (Special Seats–CCM) sought clarification on measures being taken to prevent debts owed to local contractors and suppliers from continuing to grow, while also safeguarding domestic capital and employment opportunities for young people engaged in government projects.
Responding, Mr Munde said the government is working closely with parliamentary structures, including the Budget Committee, to strengthen oversight and accelerate payment of verified domestic arrears.
He added that priority is being given to ensuring payments reach local contractors and suppliers in order to keep money circulating within the economy, sustain businesses, protect jobs and improve livelihoods among youths involved in development projects across the country.
