Next budget to swell by 4.4pc

THE next 2023/2024 national budget is expected to increase by 4.4 per cent from the current 41.4tri/- to 43.3tri/- with priorities on financing strategic projects, paying national debt and improving social services  taking the lead.

Equally, it is projected that the economic growth rate during the calendar year 2023 will be 5.3 per cent up from this year’s growth rate of 4.7 per cent.

Finance and Planning Minister Dr Mwigulu Nchemba stated this yesterday, when tabling in the National Assembly, the guidelines for the preparation of the national development plan and the budget for the next fiscal year.

“This increase has considered the actual trend of domestic revenue collection and ongoing measures taken by the government to up revenue,” the minister argued.

Dr Nchemba said recurrent expenditure will be 28.27tri/-, with the development expenditure taking up the remaining 15.02tri/-.

This suggests that the development expenditure accounts for 34.7 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.

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.

The dream by the government to shape the country’s economy for the next calendar year by making it competitive and inclusive will come true by strengthening macroeconomics, improving production, transport and transportation infrastructure, electricity and Information and Communication Technology (ICT).

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 going 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).

Dr Nchemba said domestic revenues are also expected to go up to 31tri/- from estimates of 28tri/- for this financial year. The revenues would further rise to 37.64tri/- in the 2025/26.

According to Dr Nchemba, contribution of domestic revenues to the national budget may increase from the current 67.5 per cent to 72.9 per cent in the 2023/24 fiscal year and further to 76.3 per cent in 2025/26.

“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 year participation of the private sector in investment and trade would rise.

On his part, the Chairperson of the Parliamentary Budget Committee, Mr Daniel Sillo, said despite good intentions by the government to many priorities for the national interest, the implementation and completion of the projects were not in line with expectations.

He said several projects were taking long time to be implemented and completed.

“This situation leads the government to suffer loss because of paying interests over delayed payments,” he told the House.

The committee, therefore, advised the government to implement few strategic projects in order to avoid loss to the government.

The committee further advised the government to strengthen its oversight, so that public funds could be used properly.

“We need to do so, if we are to implement the development projects which are of benefit to the nation,” stressed Mr Sillo, while presenting the committee’s opinion in the Parliament.

He was also of the view that the Tanzania Revenue Authority (TRA), ministries, departments, agencies and local government authorities should up their efficiency in revenue collections.