Dodoma — The government on Thursday tried to explain how government funds were being spent after revelations by the Controller and Auditor General (CAG), Prof Mussa Assad, that the government disbursed only 51 per cent of the Sh11.8 trillion budgeted for development in the year 2016/17 despite tremendous improvement in revenue collection.
The CAG's remarks triggered strong reactions in both the mainstream and social media on the veracity of the revenue collection data.
Addressing reporters in Dodoma on Wednesday, Prof Assad said the government met revenue collection targets by 94 per cent in the financial year 2016/17 but disbursed only 51 per cent of the development budget. The low disbursement for development projects also comes even as the Tanzania Revenue Authority has been boasting of improved revenue collections from an average of Sh800 billion to more than Sh1 trillion, the assertion that the Minister of Finance and Planning, Dr Philip Mpango, repeated yesterday.
Flanked by four of his cabinet colleagues yesterday, Dr Mpango tried to explain where the Sh1 trillion monthly revenue collection goes. "The government spends Sh550 billion monthly on the wage bill. We also spend between Sh600 billion and Sh900 billion monthly to service the government debt. As you can see this has taken a large part of the monthly collections but what remains after paying the wage bill and servicing the debt is used to fund other government operations," Dr Mpango said.
He added: "The most important thing that I want to tell Tanzanians is that all government revenue is spent accountably," emphasized Dr Mpango.
Despite his explanation, Dr Mpango still failed to answer the CAG's concerns on lower than expected disbursements on the development budget, an expert, who asked for anonymity told The Citizen yesterday.
"We all know that most of the development funds is sourced by the government from loans. Now is it that the government has failed to get these loans? Have foreign aid not been remitted as promised? These are the things that the government should tell us!" the expert said.
The 2016/17 budget details show that 58.4 per cent (Sh6.9 trillion) of the development budget funds were expected to come from aid (concessional loans and grants) from donors and from commercial borrowing in both domestic and external financial markets. Sh4.9 trillion was expected to come from domestic revenue collection.
Meanwhile, Dr Mpango yesterday said the government was in a the process of paying the debt in medical bills to Indian hospitals which the CAG on Wednesday said had accumulated up to Sh45.73 billion in the last six months.
Dr Mpango said, "The debt has increased because of follow up treatment for patients who were previously treated for various complications such as kidney disease, neurological diseases, orthopaedic and heart surgery and some child health complications."
"The government is now reviewing the debt this April 2018 and will pay it."
Dr Mpango also added that the government had taken disciplinary measures against a diplomat at the Tanzanian Embassy in Maputo, Mozambique who occasioned a loss of Sh332.86 million. This was raised by the CAG's report on Wednesday.