Next budget notches 44.3tri/-

THE government has tabled before the Members of Parliament, the proposed National Development Plan and the budget outlook for the 2023/2024, where it plans to collect over 44.3tri/- for recurrent and development expenditures.

The new budget outlook, which the Minister for Finance and Planning Dr Mwigulu Nchemba presented before the MPs at Msekwa Hall in Dodoma on Monday, indicates a seven per cent increase from the current fiscal year (2022/23) 41.5tri/- budget.

According to Dr Nchemba, recurrent expenditure will be 29.2tri/-, with the development expenditure taking up the remaining 15.1tri/-.

This suggests that the development expenditure accounts for 34 per cent of the total budget, with the recurrent expenditure accounting for the remaining lion’s share.

“The expected increase in government’s expenditure is triggered by the increase in the demand for recurrent expenditures, including servicing the government debt and salaries for civil servants,” said Dr Nchemba.

Giving further breakdown, Dr Nchemba said the 29.2tri/- of the recurrent expenditure, a sum of 12.8tri/- is for servicing government debt and other treasury charges, while 10.9tri/- is for salaries for civil service servants, which will also cover promotion and new employment. Another 6.4tri/- is for Other Charges (OCs).

He said of the 15.1tri/- for development expenditure, a sum of 11.9tri/- is from the domestic sources, equivalent to 78.3 per cent of the amount and another 3.2tri/- is from external sources.

He also linked the increase in expenditure with the need for improving health and education services, infrastructure, preparation for the 2024 local government election and preparation of a new National Development Vision 2050.

“Again, following the country’s population increase, the costs of providing social services to the community will increase,” said Dr Nchemba.

The latest data show that the current population of Tanzania is 61.74 million, compared to 44.9 million recorded in 2012.

He said the 2023/24 proposals were targeting to create a path to fuelling a competitive and inclusive economy.

He said, of the total 44.3tri/-, domestic revenue is expected to stand at 31.4tri/-, equivalent to 70.7 per cent of the total budget, from estimates of 28tri/- for this financial year. The revenues would further rise to 37.64tri/- in the 2025/26.

Taxable revenue to be collected by the Tanzania Revenue Authority (TRA) is expected to increase by 13 per cent, to top 26.7tri/-, up from projection of 23.7tri/- to be collected in this financial year.

“Grants and soft loans from development partners is expected to reach 5.4tri/-, equivalent to 12.3 per cent of the total budget,” said Dr Nchemba.

Dr Nchemba said the government is expected to borrow 5.4tri/- from domestic sources of which, a sum of 3.5tri/- will be spent to pay matured government and treasury bonds and another 1.9tri/- will be spent to cover the costs of development projects.

Minister Nchemba further said that the government is expected to borrow soft loans amounting to 2.1tri/- from external sources to speed up the implementation of infrastructure projects.

He reminded that 2023/24 is the second year in the implementation of the 3rd Tanzania Five-Year Development Plan (FYDP III) 2021/22 – 2025/26, which aims at “Building a Competitive and Industrial Economy for Human Development”.

Accordingly, in 2023/24, specific priority areas are the construction of Standard Gauge Railway (SGR), and specifically the Mtwara-Mbamba Bay railway and its Mchuchuma and Liganga branches, Julius Nyerere Hydropower Project; improving Tanzania Airlines (ATCL), Oil Pipeline Raw from Hoima in Uganda to Tanga in Tanzania, Natural Gas Processing (LNG) in Lindi, Magadi Soda Project Engaruka, Coal, Iron and Steel Project in Liganga,

Also in the list includes Ruhudji Hydropower Project in Njombe, Rumakali Hydropower Project in Njombe,    bridges and highways construction, construction of Kilwa fishing Port and procurement of vessels, Sugarcane Farm and Sugar Factory in Mkulazi, Oil and Gas Exploration at Eyasi-Wembere basin, Oil and gas exploration at Mnazi Bay North basin and Special Economic Zones including Bagamoyo Special Economic Zone.

He said the government was also targeting to strengthen industrial production and service provision.

“This area will focus on facilitating the establishment of manufacturing industries that consume raw materials and resources available in the country,” said Dr Nchemba.

The government, he said, will keep the momentum when it comes to improving irrigation infrastructure and markets for local products.

“We are committed to facilitating citizens to take part in production and value addition on products, particularly those related to agriculture through small-scale industries,” he explained.

This, he expounded, will go in tandem with investment on human resources with a view to equipping youths with skills and formalising the same (skills).

“The government will continue strengthening production sectors and increase the pace in recovering the economy, which has been affected by the Covid-19 and Russia-Ukraine war,” he said.

The document also projects that in the next financial year, participation of the private sector in investment and trade would rise.