15 July 2014

Tanzania: Recurrent Expenditure Dependence Reflects Weakness

FACED with growing concerns that recurrent expenditure budget is higher than the capital budget, the government defends the ratio saying that it was necessary the recurrent expenditure should be bigger.

The recurrent expenditure's main problem is that it is largely comprised of pays, benefits, pension for civil servants which are all on the rise and this eats into the internal revenue leaving little for developmental work and other activities.

The debate on the issue is heated both within and outside the House with legislators expressing their dissatisfaction inside the debating chamber while ordinary wananchi expressed theirs on the street.

"How come they set aside much fund for recurrent expenditure while development expenditure remains low?" this is a normal question that arises especially during budget seasons.

According to Finance Minister Ms Saada Mkuya Salum, in 2014/2015 financial year began early this month with the government's budget standing at 19.6trillion/-. The sum of 14trillion/- has been set aside for recurrent expenditure while the remaining five directed to development projects.

One of the reasons mentioned for this puzzle is lack of adequate education of the people on the budget system. Following a series of complaints from people of all walks of life over the matter, the Budget Department in the Ministry of Finance has issued a clear-cut clarification on why recurrent expenditure in all fiscal year rests higher than funds set for development projects.

"This clarification comes amid outcry from some members of the parliament when debating the budget estimates and general public that decision to allocate much funds on recurrent expenditure than development project was unmerited," noted the Principal Economist from Budget Department, Mr Adam Msumule.

Mr Msumule with deep concerns said that Swahili translation of the recurrent expenditure 'matumizi ya kawaida' was what has been misleading people and making them believe that such expenses were worthless.

He noted that the outcry, according to their observation, was fuelled by inadequate education on budget grounding system and implementation.

Mr Msumule pointed out that recurrent expenditure means ongoing expenses of the government, such as salaries, travelling expenses, medical and education services while development projects only included tangible things like construction activities.

"All public servants' salaries, medicines and equipment in hospitals, school material and even higher learning students' fees covered by the government fall under recurrent expenditure," he noted.

He slammed the widespread, but misguided mindset which said that recurrent expenditure only included money for tea, allowances and other unnecessary spending. "Some MPs are the ones misleading the public, some deliberately and others unknowingly, saying that recurrent expenditure does not mean that we allocate all such funds for unnecessary issues," he noted.

He maintained that even funds for government debt clearance fall under recurrent expenditure. "When we repay money we borrowed for development projects, the fund falls under recurrent expenditure. In this case, we should understand what actually the words recurrent expenditure means," he added. Mr Msumule stated that even billions of money the government sets aside every year for Higher Education Students' Loan Board (HESLB) to fund Tanzanian students' studies was included in the recurrent expenditure category. He noted that it was impossible for the country to attain economic development without borrowing either locally or from outside.

There is need for enhanced accountability among government officials to ensure that mwananchi at the grassroots can access essential services. In a move aimed at ensuring that the general public understands budgets system, the Ministry has embarked on a process to educate the people on the budget system. Mr Msumule noted that through various exhibitions, the Ministry was geared to ensure that it offers adequate education to people of all walks of life on how national budget was prepared. "The Ministry has also prepared some handouts for the general public. In these books there is all necessary information on the government expenditure at the national, regional, district and village level," Mr Msumule explained. He noted that those brochures were written in a very simple language to enable everyone to understand. "We have distributed these booklets all over the country and aim at making people fully understand the role of budget department and how it carries out its activities. Likewise, we aim at making them realize that no statistical fabrication in the budgeting process," he explained.

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