Tanzania reduces donor dependency even further

Dodoma. The government plans to further reduce dependency on donors in financing its development budget as it comes to terms with the unpredictability of foreign support in recent years.

Figures produced by Finance and Planning minister, Dr Phillip Mpango - when he presented the Economic Survey Report for 2017 and the National Development Plan for 2018/19 in Parliament yesterday - show that funds for development this year will remain almost the same as last year’s.

A total of Sh12 trillion will be set aside to finance development projects in 2018/19, Dr Mpango said.

The amount is almost the same as Sh11.999 trillion that was budgeted for development financing during the current financial year.

Out of the Sh12 trillion however, said Dr Mpango, Sh9.876 trillion will be sourced locally while Sh2.13 trillion will be sourced from foreign sources. Foreign funding in the current financial year budget was Sh3.03 trillion.

This year’s development funding signals a 10 per cent increase in domestic financing of development projects which stood at Sh8.97 trillion during the 2017/18 financial year. Dr Mpango did not divulge more on the shifting modalities of development financing. He, however, noted that the government had released only 42 per cent of the approved development funds for the 2017/18 financial year. He said until April 2018, the government had disbursed Sh5.1 trillion for implementation of development projects. Of the money, Sh4.35 trillion was sourced domestically while development partners disbursed only Sh775.8 billion – equivalent to 25.6 per cent of their Sh3.03 trillion pledges.

The Sh12 trillion development funds will be spent on five key priority areas which will get the largest chunk of Tanzania’s 2018/19 budget in the endeavor to grow the economy and put the country on the right path to achieve its development goals.

The areas include: establishing industries, promoting and sustaining the achieved gains in education, health and other social services, improving the business climate through rehabilitation of infrastructure, improving citizens’ access to financial services and moving core government functions to Dodoma.

On establishment of industries, Dr Mpango said the objective will be creating those (industries) that utilize locally available raw materials, mainly agricultural produce, minerals and natural gas.

Provision of social services, especially education and specialized health facilities in rural areas as well as clean and safe water will be given special attention.

On the aspect of improving the environment for doing business, Dr Mpango said emphasis will be put on construction and rehabilitation of the relevant infrastructure including energy, railways, roads, bridges, airports and ports as well as procurement and rehabilitation of ships and ferries.

“The priority areas in this category include Rufiji Hydropower Project, Crude Oil Pipeline from Uganda to Tanga, Lindi Liquefied Natural Gas Plant, Standard Gauge Railway Line and reviving of Air Tanzania Corporation,” he said.

Phase 2, 3 and 4 of the Rapid Bus Transit will be key in the plan too.

Rapid Transit and construction of flyovers in the commercial city.

He said the government will collaborate with other stakeholders, including the private sector, in the endeavor to turn Dodoma into a modern city.