These are the priority areas for the Sh34.88 trillion budget in 2020

Dar es Salaam. The government will cautiously raise the FY-2020/21 budget as it seeks to maintain the country’s sound economic performance amid a demanding election year.

Presenting the government’s development plan and budget framework estimates for 2020/21 financial year to MPs in Dodoma yesterday, Finance and Planning minister Philip Mpango pegged the 2020/21 Budget at Sh34.88 trillion, a five percent rise from the Sh33.1 trillion for the current financial year.

Dr Mpango said the government will continue with the implementation of strategic projects such as the standard gauge railway (SGR) and Nyerere Hydropower dam which is expected to generate 2,115 megawatts.

Development expenditure which also includes the election spending will increase to Sh12.9 trillion from Sh12.25 trillion currently while the recurrent expenditure will rise to Sh21.98 trillion from Sh20.86 trillion.

The development expenditure which accounts for 37 percent of the total budget will go to priority areas identified in the plan.

Such areas include industrialization, infrastructure development and improvement of social services.

The government plans to allocate Sh2.1 trillion from the local financing resources for the development of SGR project and Sh1.6 trillion for the Nyerere hydropower project whose implementation is said to be at 10.74 percent for now.

“It should be remembered that this is the last budget for implementing the ruling party CCM’s 2015 manifesto. So, it will continue with poverty reduction efforts, reducing unemployment, stepping up the fight against corruption and maintaining peace and security,” said Dr Mpango.

“For the government to achieve the goals, we will continue improving revenue collections for implanting the strategic projects and provision of better social services. We also continue to closely monitoring the use of public resources to ensure the value for money in the development projects,” he said.

The framework indicates that tax revenue estimates as collected by the Tanzania Revenue Authority (TRA) is expected to increase from Sh19.1 trillion in the current financial year to Sh20.3 trillion in the next financial year.

The government will also increase its external non-concessional borrowing from the current Sh2.3 trillion to Sh3.03 trillion while revenue from local government authorities will increase from Sh765.5 billion to Sh814.96 billion.

Dr Mpango said the government will focus on improving the business and investment environment to support growth of the businesses; facilitating voluntary tax payment and widening the tax base in Tanzania.

He also said the government the revenue policies will also address the challenges in tax administration system to reduce tax avoidance, harmonizing taxes for the purpose of easing payment and encourage more use of electronic payment of the taxes.

He said the government will continue collaborating with the development partners as well as borrowing under soft conditions.

Recently, the government signed a $1.46 billion loan agreement with Standard Chartered Bank Tanzania to fund the construction of 550 km of the SGR running between Dar es Salaam and central Tanzania.

Once complete, the rail network will connect Tanzania with Burundi, Rwanda and the Democratic Republic of Congo.