Tanzania less dependent on donors

  1. Posted on Friday 13 June 2008 - 09:39
    deodatus
    deofuga@yahoo.com
    Deodatus Mfugale, AfricaNews reporter in Dar es Salaam, Tanzania
    Tanzania will spend 7.22 trillion shillings (about 6.00 billion USD) in the coming financial year, 2008/09, with the donor contribution going down from 42 percent last year to 34 percent, finance minister Mustapha Mkulo has told the parliament.
    Jakaya_kikwete
    Presenting the government budget for the coming fiscal year in the National Assembly in Dodoma, Mkulo explained that “the budget will carry no deficit”.

    Speaking on priorities in the budget, Mkulo said that roads, energy, health, education, agriculture and water have been allocated the biggest chunk of the budget- 64 percent of the total budget.

    The reduced budget support from donors, he said, is a result of the government’s efforts to scale up revenue collection from its sources and at the same time reduce government borrowing in order to finance the budget.

    According to the Minister, domestic revenue would rise to 4.73 trillion shillings up from 3.50 trillion shillings estimated in 2007/08 fiscal year. “About the same amount will go to recurrent expenditure, while the rest will be channelled to development projects,” the Minister said.

    The budget has also allocated 2.49 trillion shillings for development expenditure out of which 1.95 trillion would come from government sources of revenue.

    Earlier presenting the findings of an economic survey to the House, the Minister explained that this year the country’s economic growth would rise to 7.8 percent from 7.1 experienced last year.

    “Our aim is to bring inflation down to less than 7 percent by May/June next year. We will also see a steady rise in the economic growth rate in each year up to 2011,” he said, elaborating that it will grow by 7.8 percent this year, 8.1 percent in 2009, 8.8 percent in 2010 and 9.2 percent in 2011.

    He explained that the government had targeted average inflation at below 4.5 percent by the end of the current fiscal year but hastened to say that it would likely stay at above five percent mainly because of high global oil prices.

    Available data indicates that the country’s foreign exchange reserves rose to 2.75 billion USD in 2007, an equivalent of 4.6 months of import cover. The government targets foreign exchange reserves of at least five months of import cover in 2008/09.

    The major sectors that have contributed to the country’s GDP include agriculture telecommunications and construction.

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