Speaking to reporters over the weekend in Dar es Salaam, Deputy Finance Minister Mwigulu Nchemba said; “Tanzania is now on a journey of self dependency when it comes to the national budget.”
“There are many ways of getting funds to meet the budget,” noted the Deputy Finance Minister and according to him the nation also has many public institutions with sufficient money to beef up the budget.
Deputy Minister Nchemba was responding to questions from the media on as to the effects of donors’ withholding budget support in the wake of the infamous Bank of Tanzania Tegeta Escrow Account scandal involving billions of shillings.However, he said the development partners had the right to withhold the over 1trn/- budget support due to the said scandal.
He said anyone who offers budget support can act as was the case with the development partners.
The official said the only way to avoid such inconveniences is to ensure that the government is in a position of funding its budget 100 percent.
Other areas that the deputy minister says would assists the national budget is on tax havens and tax illicit.
“The government is now strict on these so called tax havens - where big firms pay less or tax exempted in some cases. We have made it clear that rich people and big companies have to pay taxes so as to fill the gap in the national budget and other needs,” said the minister.
“We are now very strict on taxing the richest people or companies so that we channel such funds to projects like the construction of schools, roads and hospitals,” he added.
Development partners chairperson who is Finnish Ambassador to Tanzania Sinikka Antila, was quoted last year as saying that nearly 1trn/- which was meant to support the country’s 2014/15 general budget, had been suspended pending the release of the IPTL probe reports.
Antila said that the donor community was concerned over how the escrow monies were paid to the company that claims to have bought 70 per cent shares of IPTL, which were held by a Malaysian firm, Mechmar Berhad Corporation.
The donors, said the Finland ambassador, would wait for the final CAG report before making any categorical commitment to support the national budget.
“Budget support development partners in Tanzania take the emerging IPTL case with the utmost seriousness and are carefully monitoring its development as the case involves large amounts of public funds,” she said then.
“We meet with the government regularly to discuss budget support issues,” said Antila.
According to Antila, in March 2014, firm commitments for budget support in the financial year 2014/15, worth $558 million, were communicated to the government with the caveat that releases would be informed by developments in relation to the IPTL case.
She said the development’s contribution to the budget finances stands at approximately five per cent of the national public expenditure programme.
“Development partners are now awaiting the CAG report and information about its key findings, as well as a response from government, which will determine our decisions on further disbursements,” said the envoy.
In the same vein, the development partners from six countries had expressed their concern over the utilisation of financial support by the government of Tanzania.
The donor countries - Finland, Sweden, the Netherlands, Ireland, Japan and Germany - which had collectively contributed about US$560 million (TSh900 billion) to the Tanzanian government's 2013/2014 General Budget, met in Dar es Salaam, late in November 2013, to discuss various issues concerning the donation, the utilisation of foreign aid and general development programmes in the country.
The issues, which donors strongly reacted against, included the slow pace of dealing with corruption issues. The consensus amongst this donor community is that the government of Tanzania has not shown strong enough commitment to dealing with the problem. There is concern that the country has been failing to capitalise on the achievements it has made in recent years.
Speaking on behalf of other donors, Swedish Ambassador to Tanzania Lennarth Hjelmaker observed that the war against corruption has been slowing down annually in recent times. Hjelmaker added that there had been no serious movement on corruption cases affecting key sectors such as health, logistics and energy.
In particular, he expressed alarm at corruption affecting work at the port in Dar es Salaam, which is a main source of the country’s economic growth.
“The lack of movement on specific anti-corruption cases in key sectors like health, the port and energy is worrying,” he said. “We strongly encourage the government to intensify the war on corruption.”
The donors, who had promised to inject $558 million (437 million euro) into Tanzania's 2014/15 budget, have so far only released 110 billion Tanzanian shilling ($65 million or 51 million euro). They insist that they will only release the rest of the budget after having seen a credible outcome of the investigations into the alleged graft.
SOURCE: THE GUARDIAN
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