Govt commits to debt servicing
DODOMA: FINANCE Minister, Dr Mwigulu Nchemba yesterday tabled 18.17tri/- budget for his docket for the 2024/2025 fiscal year, with 13.13tri/-, equivalent to 72.26 per cent allocated for servicing the national debt.
In his budget speech, Dr Nchemba revealed that 17.63tri/- is recurrent expenditures, with a significant portion going towards national debt servicing; 2.61tri/- for Consolidated Fund Services, 946.45bn/- for paying salaries, 937.30bn/- other expenses related to the ministry and its institutions, and Additionally, the minister requested the August House to approve 544.05bn/- for development expenditures.
The ministry’s priorities in the next financial year include generating 44.19tri/- out of the projected 49.35tri/- national budget for the 2024/2025 financial year, strengthening and overseeing revenue, expenditure, and asset management systems of the government.
Highlighting other priorities, Dr Nchemba said the ministry will ensure timely servicing of the government debt and enhance the debt information database.
“The ministry will continue to provide financial literacy to citizens with the aim of promoting inclusive financial services in the country and build capacity for internal auditors, audit committees, and risk management coordinators in public institutions,” he said.
The minister also unveiled plans for various institutions under the ministry in the fiscal year 2024/25.
He said the Tanzania Revenue Authority (TRA) expects to collect a total of 29.42tri/- in tax and non-tax revenues. “Out of this amount, 28.87tri/- are tax revenues and 541.1bn/- are non-tax revenues.
Also, TRA will continue to implement a strategy to control smuggling activities to reduce revenue leakages,” he added.
TRA will receive 25.97bn/- from the Consolidated Fund Services for the implementation of development projects, including enhancing and improving government revenue management systems, procuring equipment, and enhancing the working environment, particularly office buildings, the minister said.
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Dr Nchemba told the House that the National Board of Accountants and Auditors plans to register 300 accountants and auditors at various membership levels; provide training on financial statement preparation and auditing to 12,500 accountants and auditors.
He revealed that the Bank of Tanzania (BoT) will continue to implement monetary policy using a new system that utilizes the central bank interest rate.
Dr Nchemba explained further that based on the global economic trends, the implementation of monetary policy for the year 2024/2025 is expected to continue controlling inflation within the target of 5 per cent.
He highlighted other BoT plans for coming fiscal year including; controlling the interbank lending rates for seven-day loans between banks; managing the monetary policy trends to align with the objectives of the Extended Credit Facility (ECF) programme; monitoring financial institutions to set interest rates and exchange rates based on market forces; and participating in the interbank foreign exchange market to control foreign exchange reserves.
The minister said the Tanzania Investment Bank (TIB) plans to increase the bank’s capital to 204.61bn/- from 86.61bn/- in 2023 and to provide loans amounting to 89.02bn/- compared to 9.74bn/- in 2023.
The Tanzania Commercial Bank plans to generate revenues of 225bn/-; increase pre-tax bank profits to 37.3bn/-; provide loans amounting to 1.173tri/-; and collect customer deposits totaling 1.34tri/-.
The minister’s budget speech also showed that the Unit Trust of Tanzania – UTT AMIS expects to increase fund assets to 2.643tri/- in the 2024/2025 financial year from 2.13tri/- in 2023/2024 financial year; increase the number of investors to 367,500 in the year 2024/2025 from 310,806 in 2023/2024; and grow pretax profit to 28.03bn/- from 18.82bn/- in 2023/2024.
In the fiscal year 2024/25, five educational institutions under the ministry are expected to enroll a total of 86,098 students, including 12,450 students at certificate level, 18,848 students at diploma level, 49,549 students at degree level, and 5,251 students at postgraduate level.
Giving the breakdown, he said, the Institute of Financial Management expects to enroll 17,775 students, the Tanzania Institute of Accountancy 30,972 students, the Arusha Accountancy Institute 19,136 students, the Institute of Rural Development Planning 16,652 students, and the Eastern Africa Statistical Training Centre 1,563 students.
The Budget Committee, tabling its report on the implementation of the Finance Ministry’s responsibilities for the financial year 2023/2024 and its views on the ministry’s budget estimates for the 2024/2025 fiscal year, called on the government to revise pension benefits to align with the cost of living.
The committee equally asked the government to establish pension monitoring centers at the district level to assist retirees in accessing their benefits without having to travel long distances, and to store digitally documents containing information about employees and retirees to eliminate inconvenience for retired employees and those who will retire.
The Budget Committee’s Vice-Chairperson, Twaha Mpembenwe, also noted that their analysis revealed that many government employees are being paid low salaries that do not keep up with the rising cost of living, and recommended that the government should increase the salaries.
“The committee also recommends that the government consider the possibility of including allowances in the salaries of employees to increase the amount of pension when those employees retire,” Mr Mpembenwe said.
