ARUSHA: FINANCE Ministry and the Regional Administration and Local Government docket have until January 15 of next year, to reinstate the Local Government Authorities (LGAs) system of disbursing 10 per cent budget to special groups.
This is according to a directive issued by Prime Minister Kassim Majaliwa.
Opening the National Financial Services Week on Wednesday, Mr Majaliwa said it was high time the system of disbursing 10 per cent LGAs budgets for women, youth and people with disabilities reinstated after it was suspended following irregularities.
“I’m sure that some issues could have been ironed out by now after the process was marred by some irregularities”, the Premier said.
According to the Prime Minister, while the government had good intention with the system, some dishonest civil servants used the loophole to benefit themselves.
Section 37A (1) of the Local Government Finance Act requires all LGAs to set aside 10 per cent of their budgets for the financial empowerment of groups of women, youth and people with disabilities at the ration of 4:4:2.
According to the provision, the funds shall be appropriated as loans to registered groups of women, youth and people with disability by forty per cent for women, forty per cent for youth and twenty per cent for people with disability.
Nonetheless, a 2020/21 report by the Controller and Auditor General (CAG) revealed numerous irregularities in the management, disbursement and recovery of the funds.
Such flaws include the failure of 10 LGAs to disburse 6.8bn/- and 155 LGAs failure to recover 47.1bn/- in the 2020/21 fiscal year of review.
In the same vein, the Prime Minister urged the Ministry of Finance to strengthen systems that will protect users of financial services from fraudsters.
“The ministry must come up with a special initiative that will encourage the use of financial services among Tanzanians, which also entails demanding for receipts after every service,” he said.
According to Mr Majaliwa, the onus was on service providers on ensuring that members of the public are conversant with financial services by laying bare terms and conditions before entering into contracts.
The ongoing National Financial Services Week has seen the participation of banks, microfinance institutions, insurance companies, trusts and funds operating to disseminate information and hold free seminars about their products and services.
It is also part of the Government’s Financial Sector Development Plan 2021/22-2029/30 and the 5 Year National Education Plan of Finance 2019/20-2025/26 that aim to provide awareness and education about financial services to the general public.
The government intends to make 80 per cent of the population aware of financial matters by 2025.
For his part, Minister for Finance, Dr Mwigulu Nchemba said the government will continue raising awareness and understanding on financial services among Tanzanians, calling on members of the public to spare time in reviewing terms and conditions pertaining services rendered by financial institutions.
“They not only provide clarity about what should happen in any given situation, but also set out the key commercial and helps the contractual parties to understand their duties, rights, roles and responsibilities”, he added.