Finance Minister turns down calls to adjust budget

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Winding up the debate on the government’s Sh34.88 trillion budget for the financial year 2020/21, Dr Mpango said with no lockdowns, the country’s economy was not largely affected.
About 371 legislators took part in the voting for the budget with 304 approving the budget while 63 MPs disapproved the budget.

Dar es Salaam. The Finance and Planning minister, Dr Phillip Mpango, yesterday turned down calls to adjust the 2020/21 Budget to cushion the economic impact of the Covid-19 pandemic, insisting that Tanzania’s economy remained relatively stable despite adverse effects of the crisis.
However, Dr Mpango said the government would be ready to do necessary adjustments on the Bud-get in response to the crisis when necessary.
“We will keep monitoring economic indicators and a wider budget implementation and if necessary, the government will be ready for the budget adjustment during the medium review term in December,” noted Dr Mpango.
Winding up the debate on the government’s Sh34.88 trillion budget for the financial year 2020/21, Dr Mpango said with no lockdowns, the country’s economy was not largely affected.
About 371 legislators took part in the voting for the budget with 304 approving the budget while 63 MPs disapproved the budget.
Thirteen MPs did not vote.
The Opposition camp and the parliamentary budget committee last week called for key budget adjust-ments to help mitigate the effects of the Covid-19 pandemic and make its implementation more realistic.
The budget committee’s chairman Mashimba Ndaki stressed the need for internal reallocations so that the budget would reflect the needs of the people amid the pandemic.
Tabling the Sh23.646 trillion alternative budget on Friday last week the Finance and Planning shadow minister, Ms Halima Mdee, called for adjustments of the budget to make it realistic, and cope with the pandemic which, she said, has wreaked havoc on the country’s economy.
The government estimates that Tanzania’s economy will expand by 5.5 percent in 2020, less than an earlier projection of 6.9 percent due to the impact of coronavirus.
“Real GDP [gross domestic product] growth rate is expected to slightly decline from the previ-ous estimates of 6.9 to 5.5 percent in 2020 compared to 7.0 percent in 2019.
This is a result of Covid-19 which has affected most of our trading partners.” Dr Mpango told the Parliament last Thursday.
The projected 5.5 percent GDP growth rate is higher than the World Bank’s 2.5 percent.“The coronavirus pandemic has dramatically undercut Tanzania’s growth outlook and will increase poverty in 2020,” stated the World Bank’s Tanzania Economic Update which was published last week.
“Growth is expected to remain positive but dip sharply in 2020 to 2.5 percent assuming the govern-ment takes action to strengthen the health response and help mitigate impact on livelihoods,” it added.
Reopening its airspace to both scheduled and non-scheduled international passenger flights in May 18 following its closure in April in the wake of the Covid-19, the government is positive to lower the impact of the pandemic on the aviation industry, tourism and a wider economy.
In a budget which was passed yesterday by the lawmakers, the government scrapped about 60 levies to reduce operational costs and stimulate economic activities.
He said the government was doing all in its power in talking with inter-national financial institutions to get financial relief for fighting against the pandemic.
Recently, the International Monetary Fund (IMF) executive board approved $14.3 million (about Sh32.6 billion) debt relief to Tanzania under the Catastrophe Contain-ment and Relief Trust.
IMF debt service relief will help free up resources for public sector health needs and other emergency spending, as well as mitigate the bal-ance of payments shock resulting from the pandemic.
Dr Mpango said the government has also secured a $15.16 million (about Sh34.8 billion) grant from the Global Partnership for Education to improve the learning envi-ronment during the hard times that the world was going through.
The government also submitted the grant request to the World Bank through the Pandemic Emergency Financing Facility.
It also talked to other developing partners for debt payment suspension. “The government has not slept. We are doing all in our power to find other sources of revenue to mitigate the impact of the Covid-19,” Dr Mpango told The Parliament.
“‘Hawa wajomba’ (development partners) have their issues, they have been hit by the Covid-19. So, we need to give a heavy weight to domestic revenue sources,” said Dr Mpango