Citing World Bank data, Finance and Planning minister Dr Mwigulu Nchemba said yesterday that per capita income increased from an average $178.3 in 1990-1995 to $365 during the third phase government, rising to $747 on average during the fourth phase and $1,010 on average during the fifth phase.
Overall poverty has constantly been reduced, reaching 25.7 per cent in 2020 down from 38.6 per cent in 1992, thanks to government efforts to improve the provision of social services, free education and empowerment through the Tanzania Social Action Fund (TASAF).
Addressing a press conference here on economic achievements in the 60 years of independence, he said the country experienced the highest inflation rate of 36.1 per cent back in 1984, 35.9 per cent in 1990 and 35.3per cent in 1994 due to drought and higher fuel prices in the world market.
The last time the country experienced double digit inflation rate was in 2012 at 16.1 per cent and thereafter it has remained at single digit level, the minister noted, highlighting that from 2013 to 2020, the rate of inflation remained below the convergence criteria of eight per cent set by the East African Community (EAC) and three to seven per cent by SADC consensus.
The country went through the first and second generation financial sector reforms that included various policies, laws and regulations enabling the setting up of 55 banks and financial institution by 2020, 32 insurance firms, 28 listed firms in capital markets and reducing social security funds to two, he explained.
As for microfinance services, there were 549 service providers not taking deposits, 460 savings and credit cooperatives (SACCOS) and 11,149 village community banks (VICOBA) by August 2021. This permitted financial services inclusion from 56 per cent in 2013 to 65 per cent in 2017 and is expected to attain 75 per cent next year, the minister asserted.
From 1966 to 1992 the government observed a fixed exchange rate which had to be abandoned following economic imbalances in the 1980s as the local currency declined and high inflation rates persisted, he stated.
A structural adjustment program was embraced in 1982 and 1983 followed by an economic recovery program from 1986 to 1989, whereupon the country adopted a floating exchange rate regime in 1993, he explained, noting that this strengthened local currency against the US dollar and other international currencies.
Since 1993 when the government allowed free currency trading, the local currency has maintained continued stability, he further observed.
Despite the variety of revenue collection arrangements, the first phase government managed to collect a total of 5,557.3m/- between 1966 and 1985, an average of 18.3 percent of the GDP, he said.
Establishing the Tanzania Revenue Authority (TRA) in 1997 and introducing electronic revenue collection domestically had boosted revenues, he said, affirming that collections averaged 130,853m/- in the second phase annually, 954,339m/- in the third phase, 6,403,888/- during the fourth phase and 18,957,084/- during the fifth phase government.
Despite annual increase in revenue collections, amounts gathered do not meet all budgetary needs, thus posing drawbacks in implementing development projects, he said.
In the past financial year domestic revenue collection was 85.6 per cent of targeted collections and in the first quarter of 2021/2022 fiscal year collections reached 5,492.1bn/-, equivalent to 89 per cent of the 6,170.90bn/- collection target, he pointed out.
Tanzania has had a budget surplus for only three years since independence, being 1989 (6,782m/-), 1990 (8,052m/-) and 1991 (9,601m/-). Other years saw budget deficits with the government effecting various measures to boost its capacity for revenue collection and expenditure, he added.