Revealed: Focus areas in Tanzania’s 2024/25 plan

Dar es Salaam. The government said yesterday it will take a raft of measures in the next financial year to create an inclusive economy.

The 2024/25 financial year, whose budget is currently pegged at Sh47.42 trillion, will see efforts directed at creating more jobs, creating wealth and promoting the export of value-added products.

Presenting the National Development Plan for 2024/25 in Parliament in Dodoma yesterday, the Minister of State in the President’s Office (Planning and Investment), Prof Kitila Mkumbo, said emphasis would be placed on increasing productivity and value addition in the agriculture, livestock, fishing, forestry and mining sectors.

The government will also focus on promoting and improving the quality of education and training at all levels and enhancing the use of technology.

Prof Mkumbo said the government would prioritise the rural economy so that it becomes an integral part of the national economy.

According to the minister, since 65.1 percent of the Tanzania’s population lives in rural areas, agriculture remains the main production activity.

However, with 61 percent of the workforce being employed in the agriculture sector, the growth rate of the rural economy is not proportional to that of urban areas.

“It is also important to consider the fact that financing systems for economic activities are not well integrated with rural agriculture. While all commercial loans in the country amount to Sh22 trillion, only seven percent goes to agriculture,” Prof Mkumbo said.

As part of efforts to promote rural socio-economic development, the government plans to increase its support for smallholder farmers, promote the setting up of primary processing factories, improve social and economic infrastructure, boost digitalisation and implement favourable financing policies.

These development targets are expected to be complemented by positive prospects of economic growth, which is projected at 5.2 percent and 5.8 percent this year and in 2024, respectively.

According to Finance minister Mwigulu Nchemba, while the inflation rate is expected to remain in single digits between 3 and 7 percent, tax collections are expected to reach 12.4 percent of gross domestic product (GDP) from the current ratio of 11.9 percent.

Dr Nchemba said the government plans to collect and spend Sh47.42 trillion in 2024/25.

This is about Sh3 trillion higher than the current financial year’s Sh44.39 trillion Budget.

According to him, Sh34.43 trillion would be collected from domestic sources. This is equivalent to 72.6 percent of the entire budget.

“Development partners are expected to contribute Sh4.29 trillion. The government expects to borrow Sh6.14 trillion domestically and Sh2.55 trillion will be sourced from foreign lenders,” Dr Nchemba said.

He added that domestic revenue would be boosted through new sources and improving collection systems for institutions with joint service provisions such as one-stop centres by having an integrated payment number to make tax payments easier.

“The government will also implement policies aimed at promoting electronic payments and move away from cash-dependent set-ups, formalising micro and small businesses and service providers and establishing new patriotism awards through the electronic fiscal device (EFD) receipt system.”

The government also plans to improve the general economy by boosting the private sector’s participation in business and investment and continue to mitigate risks associated with natural and unnatural factors such as drought, war, epidemics, and floods.

“We will continue to implement development projects and sustain food security, good governance, unity, peace, and security both within the country and in neighbouring nations,” Dr Nchemba said.

In its statement, Parliament’s Budget Committee cautioned the government against pursuing too many plans that are left unfinished for a long time at the end.

On that note, the committee advised the government to only implement projects that can be completed in time, invite public-private partnerships, and prepare important infrastructure before implementing a project.

“The committee advises the Government in fiscal year 2024/25 to direct the responsible officers to identify all existing projects that have PPP potential. The government should allocate Budget enough in the (PPP Facilitation Fund) to be used to prepare proposals that will enable projects to be implemented in this system,” committee chairman Daniel Sillo said.

To ensure the success of the 2024/25 plans the committee has also advised the government to review the Economic Empowerment Act of 2004.

The committee also commended the government in the tax collection efforts and urged that there should be an expenditure review to ensure the public funds are being spent as required.