Dowans power plant in Dar es Salaam. The country’s Ministry of Energy and Minerals will benefit from the additional funds in the budget. Photo/Leornard Magomba
The Tanzanian government was forced to add an extra Tsh538.6 billion ($33.07 million) to the 2013/2014 budget following discussions with the Parliamentary Budget Committee under the newly introduced budget cycle.
Under the new system, sectoral ministries present their proposals first, before the national budget is presented in parliament to allow for adjustments after input from MPs.
“Following the dialogue between the budget committee and the government, a total of Tsh538.6 billion ($33.07 million) has been added to this budget,” said Minister for Finance and Economic Affairs, William Mgimwa.
Among the ministries to benefit from the additional funding are the Ministry of Agriculture, Food Security and Co-operatives; Treasury; Ministry of Energy and Minerals; the Ministry of Transport and the Ministry of Livestock and Fishing Development.
“At Treasury, the funds are meant for analysis of extra sources of revenue that have been suggested in the budget; while funds at the Ministry of Energy and Minerals will go towards rural electrification through the Rural Electrification Agency (REA). The Ministry of Agriculture will use the money for subsidising fertilizer for our farmers,” said the minister.
The Ministry of Transport is expected to use the funds for improving railway infrastructure, including capitalisation of the Tanzania Zambia Railways Authority (Tazara).
According to the minister, the Transport Ministry that has been allocated Tsh2,169.0 billion ($1.3 billion), up from Tsh1,940 billion ($1.2 billion) last year. This is in line with the focus on infrastructure that has defined Tanzania’s economic policy in the recent past.
The Ministry of Energy and Minerals follows with an allocation of Tsh1,426.9 billion ($893.01 billion), with over 60 per cent of this budget going to development expenditure.
An economist in Dar es Salaam said that the budgeting system in Tanzania had changed compared with last year. According to Honest Prosper Ngowi, a senior lecturer in economics and business at Mzumbe University, Dar es Salaam, last year the budget was insufficient, while ministries received a very small percentage of their proposed budgets.
“Most ministries received between 25 and 30 per cent of their individual ministry budgets,” he said, adding: “The government has no need to spend so much on recurrent expenditure. Rather, it should find ways to increase revenue collection because we are not doing well in that area. In order to deal with the deficit in the budget, the government has to continue relying on donors.
“Donors have reduced their contribution to the budget. They have reduced direct support and are now engaging the private sector through investments in development instead of aid,” he added.
Joseph Ndunguru, principal research officer at Mikocheni Agricultural Research Institute, said that farmers would only benefit if the priority areas identified by the government that include infrastructure (irrigation), research and seeds “are given the right push and adequate financing as per relevant ministries’ needs.”
Dr Ndunguru said that government alone will not be able to meet the needs of the ministries and other sectors through its budget, therefore it needs to co-operate with the private sector to boost the economy.
“For instance, for researchers like us to get our research findings to the targeted area, we need the support of other people. Currently, we are undertaking research concerning tissue culture protocols and the results of such research need to reach farmers; this is where we need either a private company or people to collaborate with us to help farmers access these findings,” said Dr Ndunguru.
Samweli Ogillo, CEO of the Association of Private Health Facilities in Tanzania said that the money allocated to the sector in the budget was inadequate.
“The consequences of having an inadequate budget translates into a much tougher time for Tanzanians. In the case of health services, many people will fail to access quality health services, unless they can afford to take health insurance cover,” said Dr Ogillo.
According to Dr Ogillo, the health sector needs 15 per cent of the budget but it only got 11 per cent last year, making it very difficult for the country to attain targets set under the Millennium Development Goals and the Abuja Declaration.
In April 2001, African Union countries meeting in Abuja, Nigeria, pledged to increase government funding for health to at least 15 per cent, and urged donor countries to scale up support. Only one African country, Rwanda, has reached that target.
During the financial year 2013/14, government expenditures are estimated at Tsh18,249 billion ($11.4 billion) for both recurrent and development expenditure.
Out of this, recurrent expenditure is Tsh12,574.9 billion ($7.8 billion) including Tsh4,763 billion ($2.8 billion) for wages and salaries of government institutions and agencies, Tsh3,319.2 billion ($2.07billion) is for consolidated funds service and Tsh4,492.6 ($2.8 billion) is allocated for other charges.
Development expenditure is estimated at Tsh5,674 billion ($3.5 billion) with Tsh2,982 billion ($1.8 billion) from domestic sources including net domestic financing equivalent to one per cent of GDP Tsh552.3 billion, external non-concessional borrowing Tsh1,156.4 billion ($723.7 million), general budget support loan Tsh386.2 billion ($241.7 million) and eight per cent of domestic revenue Tsh887.1 billion ($555.1 million).
On the other hand, Tsh2,692.6 billion ($1.6 billion) will be raised from external sources including projects loans and grants, Millennium Challenge Corporation projects and basket loans and grants.
