Aid to TZ down in 5 years: report

Dar es Salaam. Foreign aid in Tanzania is falling while revenue from domestic sources is increasing.

The government revenue from external sources which include loans, grants and aid decreased to Sh2.1 trillion from Sh3.6 trillion in the last five years, a National Bureau of Statistics report shows.

However, revenue from domestic sources jumped to Sh13.6 trillion from Sh7 trillion.

“The decline is good only if we don’t need loans, grants and aid from developed countries because we have more in our basket and not because of donor hesitancy of fatigue,” Repoa strategic research director Abel Kinyondo said.

Dr Kinyondo remembers how a number of Western countries spoke harshly about Zanzibar’s last polls and threatened to suspend aid to Tanzania. They said democratic principles were violated.

He also links donor reluctance to support Tanzania on government refusal to allow same-sex marriage.

“It’s high time we stood on our own feet…it is possible to change the flow of trade by reducing trade costs and improving the business environment. We should make tax rates reasonable and policies predictable to attract more investors and collect more revenue.”

“Aid plays a significant role but, generally, there is a price which a country has to pay…I’m not undermining the role of aid, but my take on this is to encourage trade and investment.”

He thinks too much economic reliance on foreigners may delay the implementation of some development plans.

That could be different if the government had ample funds.

He also spoke of global economic uncertainties.

“Worldwide economy is not stable. Donors look for excuses not to offer aid. What we should do is to find different sources of funding. We should expand the tax base.”

A University of Dar es Salaam (UDSM) senior economics, Dr Jehovaness Aikaeli, told BusinessWeek that the decline in aid occurred either because domestic tax collection improved and/ or development partners reduced their assistance.

“We appreciate the support we get from our partners, but it isn’t sustainable in the long term.”

Dr Aikaeli also urged the government to attract Tanzanians in the diaspora to invest.

“People in the diaspora have a sense of empathy and want to invest back home. If you take the power of remittance and apply it to investment, the diaspora could be a force to be reckoned with. We have the capabilities, intelligence and the competence as well as the desire to make our country a better place to live in.”

However, UDSM’s economics professor Haji Semboja believes economic dependency is not bad if the funds are used as planned. “If we don’t get funds from abroad that’s a bad indicator to the economy. It shows we are not creditworthy.”

He maintains that aid is bad if it is used improperly.

Dar es Salaam resident Emily Nyoni is happy that foreign aid to Tanzania is falling while revenue from domestic sources is increasing, saying it will reach a point when the country will be able to stand on its own feet.

“Relying on funds from development donors is neocolonialism…it’ high time we rationally used the available scarce resources to meet all of our needs.”