Tanzania has frozen new capital projects for a year in order to deploy the available resources toward the completion of ongoing ones following the withdrawal of donors over the Tegeta escrow scandal.

“There will be no any new project in 2015/16 except only projects whose dialogue is in the completion stage,” Finance minister Saada Mkuya said in her budget speech on Thursday.

Development spending in the 2015/16 budget has shrunk by Tsh526 billion ($254.6 million) and now accounts for 26.3 per cent of the total spending of Tsh5.91 trillion ($2.86 billion). In the 2014/15 financial year, it stood at Tsh6.44 trillion ($3.11 billion) or 32.4 per cent of the total budget.

The 2015/16 budget of Tsh22.49 trillion ($10.9 billion) has increased by Tsh2.642 trillion ($1.27 billion), from Tsh19.8 trillion ($9.58 billion) in the current financial year.

Most of the development expenditure will be financed locally and through commercial borrowing. This time around, aid earmarked for development projects is only Tsh1.46 trillion ($706.6 million) compared with Tsh2.01 trillion ($972.8 million) in 2014/15.

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Ms Mkuya told parliament in Dodoma on that the budget will focus on completing projects started by the outgoing government whose tenure ends in the next five months. She added that it also aims at safeguarding achievements realised in education, health, water and social welfare sectors.

Strategic projects allocated funds for completion in the forthcoming fiscal year include the extension of the Julius Nyerere International Airport, which will get Tsh27.81 billion ($13.46 million). Others are the Kinyerezi II power generation plant using natural gas that has been allocated Tsh6 billion ($2.9 million) and the Ruvu water projects which has an allocation of Tsh12 billion ($5.8 million).

There is also phase III of the Tsh1 billion ($484,027) national fibre optic project as well as strengthening and improving working tools and services for the central railway.

Others are construction of the Mbegani port in Bagamoyo, the identity cards project, voter registration, implementation of the Land Management Information System and construction of food silos.

Sector-wise, energy and minerals have been allocated Tsh916.7 billion ($443.7 million) or 5.7 per cent of the budget. The major beneficiary of sectoral allocation has been education, which will get 24 per cent of the total spending in 2015/16.

“Tsh3.87 trillion ($1.87 billion) is allocated for this sector to finance quality education and improve educational infrastructure. Out of this, Tsh348.3 billion ($168.5 million) is for advancing loans to higher education students,” Ms Mkuya said.

Infrastructure funding has Tsh2.42 trillion ($1.17 billion) or 15.1 per cent of the total budget. While Tsh322.4 billion ($156 million) is for transport infrastructure, Tsh1.6 trillion ($774.4 million) has been allocated for construction and rehabilitation of roads and bridges.

The building and improvement of harbours has an allocation of Tsh9.5 billion ($4.59 million). The health sector will take 11.3 per cent of the total budget or Tsh1.82 trillion ($880 million).