Tanzania expects to spend Tsh22.48 trillion ($12.31 billion) in the forthcoming financial year, even as experts urge realistic revenue targets.

The new budget is Tsh2.63 trillion ($1.44 billion) more than the current Tsh19.85 trillion ($10.87 billion), whose implementation was characterised by withheld funding, delayed access to external commercial loans, unbudgeted spending and wanting revenue collections.

Missing in the 2015/16 provisional financial plan are general budget support funds, hence the the drop in donor funding from 14.8 to 8.4 per cent.

Last year, donors withheld about $500 million, following the IPTL Escrow Account scam. According to diplomatic sources, not much support is expected from the donors this time around — which many say will further complicate implementation of the budget.

The funds shortage will be covered by more borrowing, both local and external, that has provisionally increased to 25 per cent of the whole budget.

Commercial loans have surged from Tsh4.27 trillion ($2.33 billion) to Tsh5.76 trillion ($3.15 billion) — equal to the local financing of development expenditure.

“Policy measures to increase revenue in the 2015/16 budget will include more local and external commercial loans to finance the development budget,” Finance Minister Saada Mkuya told the parliamentary budget meeting.

The interim estimates she presented show that the Tsh14.82 trillion ($8.1 billion) domestic revenue will fund nearly 66 per cent of the budget compared with 63.6 per cent during 2014/15. Foreign soft loans and grants will be Tsh1.88 trillion ($1.02 billion) down by Tsh1.06 trillion ($580 million) from the current level of Tsh2.91 trillion ($1.59 billion).

Increment was expected

According to the estimates, recurrent spending will jump to 74 per cent of the total budget from the current 67.6 per cent.

Being election year, the increment was expected and was previously thought would be necessitated by the Constitution referendum — which will not be held.

According to Ms Mkuya, the budget will focus on three areas: Investment in human capital development; rural electrification and water projects; and ongoing development projects especially those under the Big Results Now (BRN) initiative.