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Govt seeks emergency support from donors Thursday,
10 February 2011 00:46
By The Citizen Reporters
Dar es Salaam. The government has appealed for additional funding from donors to meet an urgent shortfall in its 2010/11 Budget.
However, a letter sent to a number of donors and signed by Finance and Economic Affairs Permanent Secretary Ramadhan Khijjah does not specify the amount of money needed to plug the Budget gap.
Finance Minister Mustafa Mkulo last June tabled a Sh11.6 trillion Budget, of which more than Sh7.79 trillion was for recurrent expenditure and about Sh3.81 trillion for development projects.
Mr Khijjah says in the letter dated January 19 that in the course of implementing the Budget, unforeseen challenges have emerged that prompted the government to bank on emergency expenditure. The major challenges include electricity generation, where government has been forced to purchase more fuel to curtail power shortages on the national grid.
Most parts of the country go without electricity for five days a week, courtesy of a punitive rationing schedule blamed on low water levels at major hydroelectricity dams, especially Mtera and problems related to gas production in Songosongo.As a result, the government has had to purchase more fuel to run heavy furnace oil (FHO) turbines to supplement power on the national grid.
Mr Khijjah says food shortage is another challenge, adding that the government has had to incur extra costs to boost national food reserves in the wake of inadequate rainfall in many parts of the country.Briefing MPs in Dodoma on Monday, Prime Minister Mizengo Pinda said at least 36 districts in 13 regions were facing acute food shortages.
Mr Khijjah says in his letter that extra funds are also needed to finance the transfer of primary education from the Ministry of Education and Vocational Training to local government authorities.President Jakaya Kikwete announced the changes when he unveiled his Cabinet after last year's General Election. He said local governments to a large extent administered primary education matters, adding that there was a need to transfer the docket to give it more focus.
Mr Khijjah says the budget financing gap became apparent during the Mid Year Budget Review that assessed performance and determined the course of action to be taken during the second half of the current financial year.
"Challenges have been indentified, especially with regard to shortfalls in revenue collection against a projection of close to 10 per cent and continued lack of rainfall, which has affected agricultural activities. All these impact negatively on the implementation of the budget, causing an unexpected funding gap, which needs financing to ensure that we stay on course," he says.
The letter has been copied to a number of development partners, particularly those comprising the General Budget Support (GBS) group, including the World Bank, European Commission and the African Development Bank.It has also been copied to the development cooperation offices in the embassies of Canada, Norway and Sweden. Also on the list are the counsellor for economic affairs at the Finnish embassy, Irish ambassador and head of development cooperation at the German and Danish embassies.
Others are the Japanese ambassador and head of the DFID office in Dar es Salaam.
Mr Khijjah also sounds optimistic, noting that achievements have been recorded in the implementation of the Budget, including encouraging signs of economic stability that put the country on track towards attaining seven per cent growth. (Mhhhhh!)
He says despite the challenges, the government is taking measures to remedy the situation. On revenue collection, Tanzania Revenue Authority has been urged to look into ways of minimising the shortfall and reaching its targets.With the exception of last December, TRA has not met its targets since the beginning of 2009/10, exerting pressure on budget execution.
In 2009/10, total domestic revenue collections (excluding revenues generated by local government authorities) were Sh4.662 trillion - a nine per cent shortfall against a budget of Sh5.096 trillion."Based on the Mid Year Review the government is reviewing some of its expenditure items, especially in recurrent budget to weed out those that will not have negative impact on the general performance. In mind are items on seminars/workshop, etc," Mr Khijjah says.
The government's request for extra funds comes almost a year after donors withheld some $220 million (Sh297 billion) in General Budget Support (GBS) for this financial year.The donors said then that their combined GBS in 2010/11 would be $534 million (about Sh721 billion), some $220 million (about Sh297 billion) less than in the current financial year, which ends in June.
10 February 2011 00:46
By The Citizen Reporters
Dar es Salaam. The government has appealed for additional funding from donors to meet an urgent shortfall in its 2010/11 Budget.
However, a letter sent to a number of donors and signed by Finance and Economic Affairs Permanent Secretary Ramadhan Khijjah does not specify the amount of money needed to plug the Budget gap.
Finance Minister Mustafa Mkulo last June tabled a Sh11.6 trillion Budget, of which more than Sh7.79 trillion was for recurrent expenditure and about Sh3.81 trillion for development projects.
Mr Khijjah says in the letter dated January 19 that in the course of implementing the Budget, unforeseen challenges have emerged that prompted the government to bank on emergency expenditure. The major challenges include electricity generation, where government has been forced to purchase more fuel to curtail power shortages on the national grid.
Most parts of the country go without electricity for five days a week, courtesy of a punitive rationing schedule blamed on low water levels at major hydroelectricity dams, especially Mtera and problems related to gas production in Songosongo.As a result, the government has had to purchase more fuel to run heavy furnace oil (FHO) turbines to supplement power on the national grid.
Mr Khijjah says food shortage is another challenge, adding that the government has had to incur extra costs to boost national food reserves in the wake of inadequate rainfall in many parts of the country.Briefing MPs in Dodoma on Monday, Prime Minister Mizengo Pinda said at least 36 districts in 13 regions were facing acute food shortages.
Mr Khijjah says in his letter that extra funds are also needed to finance the transfer of primary education from the Ministry of Education and Vocational Training to local government authorities.President Jakaya Kikwete announced the changes when he unveiled his Cabinet after last year's General Election. He said local governments to a large extent administered primary education matters, adding that there was a need to transfer the docket to give it more focus.
Mr Khijjah says the budget financing gap became apparent during the Mid Year Budget Review that assessed performance and determined the course of action to be taken during the second half of the current financial year.
"Challenges have been indentified, especially with regard to shortfalls in revenue collection against a projection of close to 10 per cent and continued lack of rainfall, which has affected agricultural activities. All these impact negatively on the implementation of the budget, causing an unexpected funding gap, which needs financing to ensure that we stay on course," he says.
The letter has been copied to a number of development partners, particularly those comprising the General Budget Support (GBS) group, including the World Bank, European Commission and the African Development Bank.It has also been copied to the development cooperation offices in the embassies of Canada, Norway and Sweden. Also on the list are the counsellor for economic affairs at the Finnish embassy, Irish ambassador and head of development cooperation at the German and Danish embassies.
Others are the Japanese ambassador and head of the DFID office in Dar es Salaam.
Mr Khijjah also sounds optimistic, noting that achievements have been recorded in the implementation of the Budget, including encouraging signs of economic stability that put the country on track towards attaining seven per cent growth. (Mhhhhh!)
He says despite the challenges, the government is taking measures to remedy the situation. On revenue collection, Tanzania Revenue Authority has been urged to look into ways of minimising the shortfall and reaching its targets.With the exception of last December, TRA has not met its targets since the beginning of 2009/10, exerting pressure on budget execution.
In 2009/10, total domestic revenue collections (excluding revenues generated by local government authorities) were Sh4.662 trillion - a nine per cent shortfall against a budget of Sh5.096 trillion."Based on the Mid Year Review the government is reviewing some of its expenditure items, especially in recurrent budget to weed out those that will not have negative impact on the general performance. In mind are items on seminars/workshop, etc," Mr Khijjah says.
The government's request for extra funds comes almost a year after donors withheld some $220 million (Sh297 billion) in General Budget Support (GBS) for this financial year.The donors said then that their combined GBS in 2010/11 would be $534 million (about Sh721 billion), some $220 million (about Sh297 billion) less than in the current financial year, which ends in June.
