13 June 2014

Tanzania: Govt Pledges Tighter Financial Discipline

Tanzania has unveiled its budget for the next fiscal year. Dwindling foreign aid and corruption losses have triggered a government austerity drive.

Finance Minister Saada Mkuya wants to "enhance transparency and accountability"

Tanzania's government is pledging to rein in tax exemptions and tighten financial discipline on officials known for lavish spending.

Tax exemptions cost Tanzania between 1.4 trillion shillings ($847 million, 625 million euros) and 2.1 trillion shillings a year in lost revenue, but finance minister Saada Mkuya Salum said the government would be keeping those which would help the country in its economic development.

Tanzania is a member of the East African Community, an intergovernmental organization of five countries in the African Great Lakes region

However, the government would be publishing quarterly tax exemption reports which would include the names of individuals, institutions and companies benefitting from them.

In a bid to keep a tighter leash on public expenditure, the government said it would in future procure goods and services directly from manufacturers and suppliers instead of through agents.

A new electronic system would be installed for the purchasing, storage and sale of fuel to ensure there was "value for money in these transactions," the minister claimed.

Billions lost through theft

A recent report by Tanzania's Controller and Auditor General, Ludovick Utouh, for 2013 revealed massive embezzlement of public funds through porous financial systems.

A quarter of Tanzania's GDP is generated by agriculture

The report said the procurement of goods and services by state agencies was questionable and had fuelled the theft of billions due to poor financial controls.

Utouh said he was disappointed by the official response to his report. "Analysis shows that implementation of my recommendations is below 50 percent. This is not a good pace for improving accountability," he said. He warned that "failure to implement my recommendations will cause the recurrence of weakness in future operations."

Foreign donors have repeatedly criticized the Tanzanian government for what they termed the sluggish pace of reforms and the fight against graft.

Tanzania received $560 million in general budget support in 2014 from a group of 14 donors, who said the government must deploy all its weapons in the fight against corruption in the public sector, especially in energy, mining and health.

Savings promised

"There has been stagnation in the fight against corruption," said Lennarth Hjelmaker, the Swedish ambassador to Tanzania and chair of the donors' group.

Tanzanian Controller and Auditor General, Ludovick Utouh is unhappy with the official response to his call to clean up public accounting

Ordinary Tanzanians have for years been protesting about government use of 4 x 4 vehicles with heavy fuel consumption at public expense.

However the government has vowed better control over expenditure with a key role for the finance ministry. Savings were also promised in government departments' use of printing materials and electricity.

Announcing the budget in Dodoma on Thursday (12.06.2014) the finance minister said the government planned to spend 19.8 trillion shillings in the next fiscal year beginning July 1. The focus of the budget would be on infrastructure, energy, education, agriculture and water resources. The government said it was targeting economic growth of 7.7 percent for 2014/2015 while aiming for a budget deficit below 4.9 percent of GDP.


Date 13.06.2014

Author Kizito Makoye Shigela / mc

Editor Susan Houlton


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