Government plans Sh620bn Budget increase

Wednesday March 13 2019

Finance and Planning minister Philip Mpango

Finance and Planning minister Philip Mpango presents the 2019/20 Budget Framework in Dodoma yesterday. PHOTO | PMO 

By Sharon Sauwa @TheCitizenTZ

Dodoma. The government plans to raise its 2019/20 budget by about Sh620 billion as it seeks to boost investments in economic infrastructure projects that would push Tanzania’s industrialisation agenda.

Presenting the 2019/20 budget framework to Members of Parliament (MPs) yesterday, the minister for Finance and Planning, Dr Phillip Mpango, pegged the coming revenue and expenditure plan at Sh33.1 trillion, an improvement from the Sh32.476 trillion in the 2018/19 financial year.

The framework, prepared under the guidance of the 2nd Five Year Development Plan – which runs between financial year 2016/17 and 2020/21 – will see a considerable amount of money being spent on four key priority areas that are meant to put Tanzania on the right path to meetings its development goals.

Where the money comes from

Out of the Sh33.1 trillion, the government will source Sh23 trillion domestically.

The central government will source a total of Sh22.2 trillion, up from Sh20.159 trillion in 2018/19.


Out of the money, Tanzania Revenue Authority (TRA) will collect a total of Sh19.1 trillion, an improvement from Sh18 trillion that was meant to be collected by the taxman in 2018/19.

The amount of non-tax revenue will rise to Sh3.1 trillion in 2019/20, up from Sh2.16 trillion in the current financial year. Local governments’ funds will rise minimally to Sh765.4 billion in 2019/20 from Sh735.6 billion in 2018/19.

The government also expects to source Sh4.9 trillion through domestic non-concessional borrowing in 2019/20 while another Sh2.3 trillion be borrowed on concessional terms from foreign sources. Development partners, through grants and non-concessional loans, are expected to bring Sh2.7 trillion into Dr Mpango’s plan for 2019/20 financial year.

Where the money goes

Particularly, money will go towards building Tanzania’s industrial base in sectors of agriculture, minerals and natural gas.

“In this area, the key projects will include construction of a Liquefied Natural Gas (LNG) plant, establishment and development of special economic zones, [establishment] of factories that will add value to agricultural, livestock and fisheries products as well as those that are aimed at adding value to minerals and other natural resources,” he said.

According to Dr Mpango, the government will also invest massively in areas that seek to pair economic development with that [the development] of social services like education, food availability, clean and safe water and health among others.

The third area that will attract focus in President John Magufuli’s fourth budget, according to Dr Mpango, will be the construction and rehabilitation of mega physical infrastructure to aid the planned industrial economy.

“The projects in this area include construction of the 2,115Megawatts hydroelectricity dam at Rufiji River; improving Air Tanzania Company Limited and building standard gauge railway line,” said Dr Mpango.

In apparent gesture to the blueprint which was adopted by the cabinet last year to set the stage for a raft of amendments to laws and regulations governing the conduct of businesses in Tanzania, Dr Mpango said a considerable time will be put towards reviewing sectoral and institutional systems as well as regulations with a view to attracting increased investments.

The fourth priority sector in Dr Mpango’s plan will be to strengthen systems and institutions that will make it easy for the government to source the funds required for the implementation of the budget.

Development versus recurrent

If the budget framework proceeds to become the actual budget, the government will spend Sh20.8 trillion as recurrent expenditure.

The money, Dr Mpango said, accommodates the civic elections that are to be held later this year as well as preparations for the 2020 general election.

Public servants will go home with a total of Sh7.5 trillion as salaries during the period between July 2019 and June 2020 while Sh3.57 trillion will be spent as Other Charges (OC).

2018/19 expenditure

During the period between July 2018 and January 2019, said Dr Mpango, the government spent a total of Sh13.75 trillion as part of the Sh32.476 trillion budget for the entire 2018/19 budget.