Tanzania pegs 2023/2024 budget at Sh43.3 trillion

Business journalist

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The government’s dream 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

Dodoma. The The government is planning to increase its expenditure by 4.4 percent in the next financial year to cater to Tanzania’s growing development needs, a cabinet minister said yesterday.
Presenting the guidelines for the preparation of the government budget for the 2023/24 financial year, Finance and Planning minister Mwigulu Nchemba said the government would spend Sh43.3 trillion during the 2023/24 fiscal year, up from Sh41.48 trillion in the previous year.
Out of the money, Sh28.27 trillion would be recurrent expenditure, while the remaining Sh15.02 trillion would be for development purposes.
“The expected increase in the government’s expenditure is triggered by the increase in the demand for recurrent expenditures, including servicing the government debt, which stood at Sh71.55 trillion as of October 2022, as well as salaries for civil servants,” said Dr Mwigulu.
The increase would also go towards the running of health and education services, preparation for the 2024 local government election, and preparation of a new National Development Vision 2050.
“Again, following the increase in the number of people in the country, the costs of offering social services to the community will increase,” recounted Mr Mwigulu.
The 2022 Population and Housing Census put the number of people in Tanzania at 61.7 million, up from 44.9 million in 2012.
He said the 2023/24 proposals were meant to foster a competitive and inclusive economy.
The economy is projected to expand by 5.3 percent next year and 4.7 percent this year, propelled by the government’s efforts in creating an enabling business environment for both local and foreign investors.
“We are determined to take trade and investment to the next level,” he said, banking his hopes on the implementation of the blueprint for regulatory reforms to improve the business environment.
He noted, however, that this year’s growth projection of 4.7 percent is lower than last year’s 4.9 percent. This was largely due to foreign factors, mostly, the war in Ukraine.
The global economy continues to be weakened by the war through significant disruptions in trade and food and fuel price shocks, all of which are contributing to high inflation and a subsequent tightening in global financing conditions.
The government’s dream 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 strengthening 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 minister 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’ participation 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 in human resources with a view to equipping youth with skills and formalising the same. He underscored that the move was meant to stimulate people’s development.
This area will also focus on the provision of social services, including health, water, and education.
However, he said that while the debt increased, the evaluation report held in November last year showed the debt was still sustainable in the short, medium, and long term based on the international measures.
On the question of the debt increase, which increased by 26.8 percent to Sh71.55 trillion as of October this year compared to a similar period last year, Dr Nchemba said the debt was sustainable.
The Parliamentary Budget Committee chairman, Daniel Sillo, said his committee was advising 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 that are of benefit to the nation,” stressed Mr Sillo as he was 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 increase their efficiency in revenue collection.