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Thursday, April 7, 2016

30tri/- ‘works’ budget unveiled

THE Minister for Finance and Planning, Dr Philip Mpango, yesterday unveiled the proposed 30 trillion-shilling (30tri/-) 2016/17 national budget that focuses on reducing donor dependence and recurrent spending while increasing funding on development projects.

Under the 30tri/- budget, which has soared by 31 per cent from the current 22.5tri/- fiscal plan, the government envisages increasing development expenditure from the 2015/16 budget’s 5.9tri/- to 11.8tri/- in the coming budget, with over 73 per cent local financing.

While recurrent expenditures have increased slightly from 16,576bn/- to 17,719bn/-, a 6.9 per cent change, development funding is expected to almost double from 5,919bn/- in the current budget to 11,820bn/- next fiscal year.Dr Mpango named industrial development, integrated economic and human resource development, health and social affairs, energy and agriculture as the priority financing sectors in the coming financial year.

According to him, the government will substantially invest into the purchase of three new aircrafts - a Bombardier CAS 300 with 100-150-seater capacity and two other planes of Bombardier Q 400 make of between 67 and 88-seater capacity - to revive the ailing national airline, ATC.

The government has allocated over 2bn/- local resources to revamp the Arusha-based General Tyre whose 100 per cent stake the state controls.

The government, through the National Development Corporation (NDC), expects to rejuvenate the manufacturing firm in partnership with the private sector.

Higher education will get a big boost in the coming fiscal year, with over 100bn/- budgeted for the renovation and expansion of 12 high learning institutions while 270,000 students at tertiary level will have 450bn/- to share as loans for their higher learning.

The government plans to inject some 967bn/- in the energy sector to execute various power generation and distribution projects in support of the industrial revolution that President John Magufuli’s administration has vowed to pursue.

Agriculture and transport infrastructure will also receive huge funding, Dr Mpango said, noting that the government will largely finance the national strategic projects using domestic resources from tax and non-tax revenues, loans and grants as well as government securities.

“A total of 29,539bn/- will be collected and spent during the (coming fiscal) year ... the total of domestic revenues, including collections from the local governments, are estimated at 18,463.5bn/-, equal to 62.5 per cent of the entire budget,” Dr Mpango told MPs in a meeting chaired by Prime Minister Kassim Majaliwa in Dar es Salaam.

He said the government was confident to increase revenue collection, saying there were many indications that the Tanzania Revenue Authority (TRA), ministries and government institutions that collect revenues have the potential to collect more.

The development partners are expected to contribute 3,600bn/-, about 12 per cent of the total budget, the minister said, adding that the government will borrow 5,374bn/- from the domestic sources to pay for matured government bonds.

The government will further borrow 2,101bn/- on commercial rates from foreign financiers to finance construction of infrastructure.

He reiterated the government commitment to strict austerity measures to curb unnecessary public spending and plug loopholes for wasteful use of public resources, with more funds directed to development projects.

As an indication of austerity measures, the government will reduce the weight of wages and other costs (OC) on total budget from 29 to 22 per cent and 16 to 10 per cent, respectively.

While wages are expected to increase slightly to 6,600bn/- from 6,466bn/-, OC will decrease to 3,119bn/- from the current 3,712bn/-.

“The 2016/17 budget will put emphasis in completing projects on progress, new development projects as well as paying for ascertained government debts ... the government will ensure that all available resources and opportunities in the country are productively utilised to develop the industrial economy and reduce poverty,” said Dr Mpango.

/Daily News.

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