The Standing Parliamentary Committee on the Budget will table a Bill seeking to subject government borrowing to parliamentary approval, in an effort to check excessive external and internal borrowing. 

Kenya and Uganda have adopted similar laws, and it will be the first time Tanzania tables the Bill in parliament.

The Bill was to be tabled on Tuesday next week when parliament winds up the budget session, but its tabling, together with the VAT Bill, has been postponed to October.

The government has already agreed that the committee should table the Bill. However, clauses giving more powers to the committee than the finance minister may cause confrontation between the government and the committee, government insiders told The EastAfrican.

Finance Minister Saada Mkuya said the Bill would help to curb expenditure by unscrupulous civil servants who collude with service providers to raise inflated invoice claims.

The Bill will also provide sweeping oversight powers to the parliamentary committee to set borrowing thresholds, and the finance minister will have to get approval from parliament before acquiring a loan. Parliament will also advise on the allocation of loans.

Soaring debt

The Bill comes at a time when MPs have expressed outrage over the soaring external debt, which stands at Tsh34.6 trillion ($13.5 billion) while the domestic debt is at Tsh6.08 trillion ($3.7 billion).

READ: IMF warns Tanzania over borrowing spree

For the past three years, MPs have been pushing for the Bill to be tabled and a parliamentary budget office introduced; Kigoma North MP Zitto Kabwe presented the Bill to parliament as a private member Bill. However, the Bill was withdrawn after the Speaker advised the MP to team up with other MPs and introduce it as a group.  

The Parliamentary Committee on the Budget was introduced in 2013, and has since been advocating for the Bill to be tabled.

Mr Kabwe said the Bill was a milestone in the development of parliamentary oversight. “The Bill is likely to create a monster in the name of the budget committee. In the future, one would want to be chair of this committee rather than being a finance minister.” 

The Bill also proposes the establishment of a national debt management office within Treasury, tasked with ensuring that the public debt is channelled to projects that will help current and future generations.

If the government changes, the Bill says the new government will seek parliament’s approval if it wants to amend the financial objectives in the Budget Policy Statement.

“The government may borrow money only for the budget as approved by parliament, and the allocations for loans approved by parliament. Parliament shall provide thresholds for the borrowing entitlements of the government and the local governments and their entities,” the Bill reads.

Under the new law, the minister will be required to submit a report, every four months, of all loans made to the government and other public entities to parliament for scrutiny and to show how the government is planning to repay the loan.