Tanzania plans a 7% increase in overall government spending in the next fiscal year during which it will prioritise spending on railways, the national airline, electricity production and natural gas, Finance Minister Mwigulu Nchemba said on Thursday.
Tanzania expects overall spending to reach 44.39 trillion Tanzanian shillings ($18.6 billion) in fiscal 2023/24 starting in July, from 41.5 trillion shillings in the current year.
Nchemba said the East African country expects to raise over two-thirds of that amount, or 31.38 trillion shillings, from domestic sources.
Of the total revenue, Tanzania Revenue Authority is expected to collect 26.73 trillion shillings tax revenues while non-tax revenue is expected to be 4.66 trillion shillings.
About 5.44 trillion shillings would be borrowed from domestic non-concessional sources and 2.1 trillion shillings would be borrowed from external non-concessional sources.
“Some of the priorities include…construction of standard gauge railway line, improvement of the national airline Air Tanzania Company Limited (ATCL), production of electricity from the 2,115 MW from Julius Nyerere hydropower project and implementation of liquefied natural gas terminal project,” he said.
In March, Tanzania completed negotiations for the construction of a $30 billion liquefied natural gas (LNG) terminal with Norway’s Equinor (EQNR.OL) and Britain’s Shell (SHEL.L).
Tanzania’s economy is largely reliant on tourism, mining, agriculture and manufacturing.
Nchemba told parliamentarians in the capital Dodoma that the government is proposing to exempt all precious minerals, gems, and other minerals sold in local refineries or mineral markets established by the country’s mining commission from value-added tax.
The government is also proposing to scrap excise duties on electric vehicles in the budget that is set to begin in July, pending parliamentary approval.
“The reason behind this decision is to promote use of electricity and natural gas in Tanzania to save foreign reserves which are used to import oil,” Nchemba said.
Meanwhile, Tanzania’s debt stock reached 79.10 trillion shilling as of April 2023, representing a 13.9% year on year increase.
Earlier on Thursday, Nchemba said that the East African country’s economy is forecast to grow 5.2% in 2023 from 4.7% last year, driven by improved performance in investment and trade.
Source: Reuters
