Tanzania plans 13 bln USD budget for next financial year

The government of Tanzania on Wednesday announced a 13 billion U.S. dollar budget plan for the 2016/2017 financial year which starts on July 1.

Phillip Mpango, the east African nation's Minister for Finance and Planning, said donors will account for only 1.5 billion dollars of the budget.

The development plan indicated substantial reduction of donor dependence in implementation of development projects, the minister told a news conference in the commercial capital Dar es Salaam.

Mpango said non-availability of funds promised by donors was one of the major challenges in the implementation of development projects.

"Many development projects have stalled or have not been implemented altogether because donors have delayed to release the money they pledged," said the minister.

He added: "The government is engaging the donors to set trustworthy modalities through which donor contributions will be realised."

Mpango said the government has identified problems associated with donor support such as strict conditions attached to the aid as well as unreliability of the donors.

"That is why it is important for the government to improve its dependence. If we want to effectively roll out our plans we should increase our dependence ratio," he said.

He said the government intended to discourage dependence by marshalling local revenue collections in order to plug holes left by donors who did not honour their promises.

Mpango added that the government planned to improve voluntary tax payment among Tanzanians to increase its revenues.

"We are going to be strict to disloyal businessmen who evade paying taxes as well as dishonest civil servants who misuse public funds," he said.

Last week, Tanzanian President John Magufuli appealed to Tanzanians to work hard in order to enable the east African nation to lessen foreign donor dependence.

"Tanzanians can stop relying on conditional loans from foreign donors if they cultivate a culture of working hard," said Magufuli.

President Magufuli has taken a number of austerity measures aimed at cutting down government spending and boosting government revenue collection.

He said these measures, including banning foreign travels for civil servants and enhancing tax collection, were aimed at improving provision of social services like free education and health and lessening donor dependence.

In February 2015, Mpango told Parliament in the country's political capital that the government intended to cut donor dependence to three percent in the next budget from the current 6.4 percent.

He said the reduced dependence would be compensated by increasing domestic tax revenue by 15 percent, borrowing commercially, cutting wasteful spending, and reviewing tax exemptions. Endit