Zanzibar unveils Sh2.8 trillion budget as GBS doubles to 9 percent

 Zanzibar’s General Budget Support (GBS) from the Union Government has increased from 4.5 percent to nine percent following negotiations between both sides of the union, the Minister of State in the Office of the President-Finance and Planning, Saada Mkuuya Salum, announced on Thursday.

Zanzibar will now receive over Sh250 billion from the Union Treasury as part of the GBS funding in the next financial year to support its development plans.

Addressing parliament, Ms. Salum said the milestone was reached following the realisation that the current 4.5 percent that was being disbursed by the Union government to Zanzibar did not reflect the economic realities of the day.

"Through the GBS system, Zanzibar has for a long time been receiving a paltry rate of 4.5 percent, which could not reflect economic and social changes," she said.

According to her, through various phases of governance, the Revolutionary Government of Zanzibar has been making efforts to negotiate with the Government of the United Republic of Tanzania to see the possibility of increasing the rate so that it is in line with the actual situation.

"In recognizing the importance of this issue politically, President Samia Suluhu Hassan and Hussein Ali Mwinyi, President of Zanzibar and Chairman of the Revolutionary Council, instructed both sides to sit together and look at the bases and professional parameters that will be best in the allocation of resources to our two sides," she said.

Ashe added: After the Professional Committees of the Government of the United Republic of Tanzania and the Revolutionary Government of Zanzibar sat together and worked on the issue, proposals based on economic and administrative criteria as well as the ability to borrow were submitted and received by the Government, and the GBS allocation for Zanzibar has doubled to 9 percent from the previous 4.5 percent.

On Thursday, June 15, the finance minister unveiled a Sh2.8 trillion national budget at the House of Representatives.

According to the minister, internal revenue is set to contribute Sh1.4 trillion, whereas aid and loans from development partners will contribute Sh686.61 billion. Internal and external loans to finance development projects have been set at Sh717.21 billion.

"I therefore request this honorable house to approve Sh2.8 trillion, of which Sh1,3 trillion have been directed for recurrent expenditure and Sh1.5 trillion have been directed towards the implementation of development projects.

On the other hand, the debt guaranteed by the Revolutionary Government of Zanzibar until March 2023 has reached Sh330.40 billion, of which the internal debt is Sh317.17 billion, equal to 96 percent of the total debt, and the external debt is Sh13.20 billion, equal to 4 percent of the debt.