Dodoma — THE Standing Parliamentary Budget Committee has voiced concerns over the increasing national debt, saying that at its current level it is a liability and a threat to the sustainability of growth contrary to what the government says.
The Chairman of the Committee, Mr Andrew Chenge, said in Parliament that the sudden leap of the debt from 23.67tr/- in March 2013 to 30.56tr/- in March 2014 is alarming and raises suspicion over the management of public funds.
"This debt, although the government says it is sustainable, it is a big liability to the nation so far and a threat to the sustainability of the economy in general," he said as he presented a report on the State of the Economy for 2013 and national development plan for 2014/15.
The report also covered an evaluation of the implementation of the 2013/14 budget and recommendation for the 2014/15 proposals.
Mr Chenge said the committee doubted whether the debt, equivalent to 57.47 per cent of the Gross Domestic Product (GDP) using current prices, is sustainable because the ratio of the debt to the GDP was not satisfactory and its level does not relate with the growth of the economy.
He said that there were many growing domestic debts that have not been included in the figure and that this indicated that the debt may not be sustainable as the government says. The government plans to use 4.354tr/-, about 21.93 per cent of the 19.6tr/- budget for the 2014/15 fiscal year to service the growing national debt.
The Minister for Finance and Economic Affairs, Saada Mkuya Salum, told the National Assembly last week that the national debt was sustainable as indicated in the results of Debt Sustainability Analysis (DSA) conducted in 2013 to assess the state of the country's debt and the ability to service it in the short, medium and longer terms.
She said that according to the DSA study all indicators were below the international debt sustainability thresholds, where the ratio of the present value of external debt to GDP was 24.8 per cent compared to the threshold of 50 per cent.
The ratio of the present value of external debt to domestic revenue was 121.2 per cent compared to the threshold of 300 per cent. The ratio of external debt service to export was 3.34 per cent compared to the threshold of 25 per cent.
Mr Chenge said the committee was convinced that the government lacked creativity by concentrating on the same sources of revenue generation. He said the government had ignored advice from his committee on new sources of non-tax revenue which included deep sea fishing, hunting blocks, forestry and mining.
"This government lacks creativity and does not want to take advice on new sources of revenue. We still call on the government to work on the advice given (on non-tax revenue)," he said.
Mr Chenge also faulted government policies and strategies for collection of domestic revenues which had led to a collection of revenue below target.
He said the committee expected the government would explain about concrete plans and strategies of meeting the targets of an expanded budget for the 2014/15 fiscal year, while is expecting a 2.014tr/- deficit in the 2013/14 budget.
The committee wants the government to review policies and plans for collection of domestic revenue, he said. "The committee doubts the policies on revenue collection. It is better the government reviewed its policies to know why there was poor performance in the 2013/14 fiscal year.