Budget takes aim at donor dependency

The Finance Minister is taking aim at donor dependency in the next budget. Photo: Daniel Hayduk

Tanzania is taking aim at donor dependency in the next budget. But is the budget realistic? Photo: Daniel Hayduk

The government is taking aim at donor dependency in the 2015-2016 budget, but some see the budget as unrealistic.

Finance Minister Saada Mkuya says the government wants to lower donor dependency to 8.4 percent, down from the current 14.8 percent.

The 2015-2016 budget has been estimated at 22.48 trillion TSH ($11.3 billion US), up 2.68 trillion TSH from the current 19.8 trillion TSH ($9.9 billion US) budget.

“It’s important to target being independent in budget funding to avoid risks in implementing projects. Donor funds come with conditions and sometimes they are not reliable, a trend that disrupts our plans,” says Mkuya.

To avoid unpredictable situations — such as donors withholding over $550 million USD in funding amid the escrow scandal — Mkuya says revenue needs to be sourced from within the country.

“The only reliable revenue that we can manage is that from domestic sources. We are strengthening revenue from the taxman and as any other country would like to be, we want to stand on our own feet.”

“But then, Tanzanians need to be encouraged to pay taxes.”

With the second largest economy in East Africa and a development rate of approximately 7 percent, there is potential to raise enough revenue to cover all expenditures, says Mkuya.

“But then, Tanzanians need to be encouraged to pay taxes.”

Budget Committee Chairman Festus Limbu says more taxes are not the answer.

“The government should reduce its lavish spending,” says Limbu, who also says the budgetary estimates were not reached in a participatory way and don’t offer any corrections or improvements over this years’ off-target budget.

“There is no budget discipline … it’s business as usual.”

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