Members of Parliament have expressed dissatisfaction over the government’s extended dependence on donors for budget support, saying good plans to exploit potential internal sources to generate revenue were lacking, and instead the country relied on increased taxes on small businesses.
Among them was Mkanyageni MP, Mohamed Habib Mnyaa (CUF). He wondered why Tanzania, a country blessed with vast land was still crying for food and depending on donors for financial support.
Mnyaa said it was not right for the government to allocate a big chunk of the budget for government expenditure rather than channelling such money for development. The MP observed that the country has failed to earmark good projects that can fuel growth and development.
Moving his budget speech here on Thursday, the minister said the government plans to spend Sh7,790,506 on recurrent expenditure and Sh3,819.501 on development expenditure.
It plans to borrow Sh2,128.832 billion (2.1 trillion) from both domestic and external commercial sources. Of that amount, Sh797.62 billion would be for rolling over maturing government securities and the remaining amount of Sh1,331.2 billion (1.3 trillion ) will be used to finance development projects.
The government said grants and loans from Development Partners would continue to form a major source of Government revenue.
“During year 2010/2011 the Government plans to mobilise Sh821.645 billion as general budget support (GBS), compared to Sh1,307.707 billion expected to be received by the end of this year,” reads the speech. Mnyaa said the Sh180 million paid to IPTL, was enough to buy a new power plant that could generate 100 megawatts. “With a budget that allows such (much) money for recurrent expenditure, how do you this country will develop?”
On his part, Tabora Town MP, Siraju Kaboyonga (CCM) also criticised the government over its decision to borrow internally from commercial banks.
He said internal borrowing of two trillion shillings will increase interest rates charged by these banks, thus limit the private sector from acquiring loans from the banks at lower interest rates.
According to the government, the decline in GBS grants and loans is due partly to funds Development Partners disbursing resources in 2009/10 resources that were planned for the financial year 2010/11 to support government initiatives in mitigating the adverse impact of the global financial and economic crisis.
Minister for Finance and Economic Affairs Mustapha Mkulo said the government would mobilise Sh2,452.908 billion in grants and loans for financing development projects and programmes.