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Tanzania: National Debt hits $9.33 bil!

Discussion in 'Biashara, Uchumi na Ujasiriamali' started by Obi, Dec 3, 2009.

  1. Obi

    Obi JF-Expert Member

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    Dec 3, 2009
    Joined: Jul 6, 2009
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    By Costantine Sebastian
    THE CITIZEN

    The national debt soared to $9.33 billion (about Sh12 trillion) in September, as the government borrowed more from internal sources to fill the gap caused by shortfalls in tax collections, The Citizen can reveal.

    According to Bank of Tanzania (BoT) figures, the debt stock increased by nearly Sh3 trillion over the same period last year, and by about Sh213 billion between September and August this year.

    As a result, the cost of debt servicing will also increase, denying the government resources for the provision of social services, payment of salaries and financing of development projects.

    The BoT's monthly economic reviews (MERs) indicate that the national debt was about $7.1 billion (about Sh9.2 trillion) at the end of October last year, before ballooning to $7.8 billion (about Sh10.1 trillion) in January 2009.

    According the October MER, government securities accounted for 99.7 per cent of the total domestic debt of about Sh2.41trillion at the end of September.

    "The outstanding domestic debt stock, as of the end of September 2009, stood at Sh2,418.1 billion. The stock recorded an increase of Sh62.7 billion from Sh2,355.4 billion at the end of the preceding month," the report reads in part, adding: "The increase was due to government financing through the issuance of marketable government bonds."

    Other factors that pushed up the debt include new disbursements and accumulation of interest on the external debt, which was 80.1 per cent of the total stock.

    The national debt burden, which grew from $1,445 million to $7,972.2 million between 1970 and 1998, was reduced to Sh7.5 trillion in June 2007, following the implementation of the G8?s multilateral debt relief initiative (MDRI).

    The new domestic debt increased by nearly four times, from the Sh606.27 billion recorded in September 2008. The total debts incurred during the first nine months of this year were nearly $1.6 billion (about Sh2 trillion) and domestic borrowing, Sh492.2 billion.

    Increased domestic borrowing means reduced funds available for lending by financial institutions to the private sector and individuals.

    A senior official at the central bank, however, dispelled fears that the surge in domestic borrowing would limit funding for productive activities.

    Government borrowing is expected to leave room for credit to the private sector to grow by 30 per cent in the year to June 2010 a comfortable rate by any standard, BoT's director of economic research and policy, Dr Joe Masawe, said.

    "Already, interest rates on government securities have fallen substantially, which is expected to crowd in the private sector," he added.

    In the last financial year, credit to the private sector grew by 33.2 per cent and reached 40 per cent before the second round effects of the global crunch, which hit Tanzania most.

    Experts say that steady lending is mostly needed to help stimulate the performance of various sectors, as part of national efforts to get the economy out of the woods.

    "The impact (of the recession) has cut across most areas of the economy, as also manifested by lower than anticipated government revenue. The revenue target for 2008/09 was missed by about 10 per cent, which necessitated increased government domestic borrowing to cover the shortage," Dr Masawe told The Citizen.

    Revenue collection did not improve in the first quarter of 2009/10, as the Tanzania Revenue Authority (TRA) missed its target by a whopping Sh100 billion.

    Impeccable sources said the situation had not been any better in the following months, continuing to put the government in an awkward fiscal position.

    Finance minister Mustafa Mkulo recently told our sister paper, the Sunday Citizen, that the shortfalls in July, August, and September should be no cause for alarm. He said that was the normal trend during the early months of the financial year, and gave an assurance that government plans would not be in jeopardy.

    According to the BoT, by September, most of the government's borrowing from local sources was from the central bank and commercial banks, which accounted for 71.3 per cent of the total domestic debt stock.

    The central bank was the leading creditor, with 41 per cent of the debt. The others were pension funds (22.9 per cent), non-bank financial institutions (two per cent), and other official entities (one per cent).

    Insurance firms, private sector creditors and funds drawn from BoT?s special fund held the remaining two per cent. Bonds accounted for 76.6 per cent of the domestic debt, while Treasury bills and government stocks accounted for 12.7 per cent and 10.7 per cent, respectively.

    Domestic debt amounting to Sh46.2 billion fell due for payment. Of this, the principal, amounting to Sh34 billion, was rolled over and interest amounting to Sh12.2 billion paid out of government revenue.

    At the end of September 2009, the external debt stock amounted to $7,474.8 million, representing an increase of 5.7 per cent from $7,357.8 million at the end of August. Out of the external debt stock, $5,932.8 million (79.4 per cent) was disbursed outstanding debt (DOD) and the remaining $1,541.9, was interest.

    Dr Masawe said funds to check the spillover of the global economic crisis had been provided by the International Monetary Fund, which gave a Sh322 billion loan for balance of payments support.

    He said that by October, the government had borrowed Sh473 billion of the Sh805 billion that had been provided for the 2008/09 and 2009/10 financial years.

    "This was factored into the macroeconomic programme in a manner that would still allow credit to the private sector to grow at a comfortable rate," the official said.

    The public debt stock reduced drastically from 2007 after the implementation of MDRI, which the G8 countries pledged in Scotland in 2005 to cancel debts for the most indebted countries.

    The initiative was to provide $3.8 billion relief to Tanzania between 2007 and 2044.

    The external debt declined to $4.9 billion in June 2007, nearly 44 per cent below the stock in June 2006.

    At the end of December 2006, the national debt stood at $7188.2 compared to $8153.7 million at the end of December 2005.

    Additional reporting by Mkinga Mkinga
     
  2. BAK

    BAK JF-Expert Member

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    Dec 3, 2009
    Joined: Feb 11, 2007
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    2009-12-03

    [​IMG]

    'The shortfalls in July, August and September revenue collections should not raise any alarm'Finance minister Mustafa Mkulo

    By Costantine Sebastian

    THE CITIZEN

    The national debt soared to $9.33 billion (about Sh12 trillion) in September, as the government borrowed more from internal sources to fill the gap caused by shortfalls in tax collections, The Citizen can reveal.

    According to Bank of Tanzania (BoT) figures, the debt stock increased by nearly Sh3 trillion over the same period last year, and by about Sh213 billion between September and August this year.

    As a result, the cost of debt servicing will also increase, denying the government resources for the provision of social services, payment of salaries and financing of development projects.

    The BoT's monthly economic reviews (MERs) indicate that the national debt was about $7.1 billion (about Sh9.2 trillion) at the end of October last year, before ballooning to $7.8 billion (about Sh10.1 trillion) in January 2009.

    According the October MER, government securities accounted for 99.7 per cent of the total domestic debt of about Sh2.41trillion at the end of September.

    "The outstanding domestic debt stock, as of the end of September 2009, stood at Sh2,418.1 billion. The stock recorded an increase of Sh62.7 billion from Sh2,355.4 billion at the end of the preceding month," the report reads in part, adding: "The increase was due to government financing through the issuance of marketable government bonds."

    Other factors that pushed up the debt include new disbursements and accumulation of interest on the external debt, which was 80.1 per cent of the total stock.

    The national debt burden, which grew from $1,445 million to $7,972.2 million between 1970 and 1998, was reduced to Sh7.5 trillion in June 2007, following the implementation of the G8?s multilateral debt relief initiative (MDRI).

    The new domestic debt increased by nearly four times, from the Sh606.27 billion recorded in September 2008. The total debts incurred during the first nine months of this year were nearly $1.6 billion (about Sh2 trillion) and domestic borrowing, Sh492.2 billion.

    Increased domestic borrowing means reduced funds available for lending by financial institutions to the private sector and individuals.

    A senior official at the central bank, however, dispelled fears that the surge in domestic borrowing would limit funding for productive activities.

    Government borrowing is expected to leave room for credit to the private sector to grow by 30 per cent in the year to June 2010 a comfortable rate by any standard, BoT's director of economic research and policy, Dr Joe Masawe, said.

    "Already, interest rates on government securities have fallen substantially, which is expected to crowd in the private sector," he added.

    In the last financial year, credit to the private sector grew by 33.2 per cent and reached 40 per cent before the second round effects of the global crunch, which hit Tanzania most.

    Experts say that steady lending is mostly needed to help stimulate the performance of various sectors, as part of national efforts to get the economy out of the woods.

    "The impact (of the recession) has cut across most areas of the economy, as also manifested by lower than anticipated government revenue. The revenue target for 2008/09 was missed by about 10 per cent, which necessitated increased government domestic borrowing to cover the shortage," Dr Masawe told The Citizen.

    Revenue collection did not improve in the first quarter of 2009/10, as the Tanzania Revenue Authority (TRA) missed its target by a whopping Sh100 billion.

    Impeccable sources said the situation had not been any better in the following months, continuing to put the government in an awkward fiscal position.

    Finance minister Mustafa Mkulo recently told our sister paper, the Sunday Citizen, that the shortfalls in July, August, and September should be no cause for alarm. He said that was the normal trend during the early months of the financial year, and gave an assurance that government plans would not be in jeopardy.

    According to the BoT, by September, most of the government's borrowing from local sources was from the central bank and commercial banks, which accounted for 71.3 per cent of the total domestic debt stock.

    The central bank was the leading creditor, with 41 per cent of the debt. The others were pension funds (22.9 per cent), non-bank financial institutions (two per cent), and other official entities (one per cent).

    Insurance firms, private sector creditors and funds drawn from BoT?s special fund held the remaining two per cent. Bonds accounted for 76.6 per cent of the domestic debt, while Treasury bills and government stocks accounted for 12.7 per cent and 10.7 per cent, respectively.

    Domestic debt amounting to Sh46.2 billion fell due for payment. Of this, the principal, amounting to Sh34 billion, was rolled over and interest amounting to Sh12.2 billion paid out of government revenue.

    At the end of September 2009, the external debt stock amounted to $7,474.8 million, representing an increase of 5.7 per cent from $7,357.8 million at the end of August. Out of the external debt stock, $5,932.8 million (79.4 per cent) was disbursed outstanding debt (DOD) and the remaining $1,541.9, was interest.

    Dr Masawe said funds to check the spillover of the global economic crisis had been provided by the International Monetary Fund, which gave a Sh322 billion loan for balance of payments support.

    He said that by October, the government had borrowed Sh473 billion of the Sh805 billion that had been provided for the 2008/09 and 2009/10 financial years.

    "This was factored into the macroeconomic programme in a manner that would still allow credit to the private sector to grow at a comfortable rate," the official said.

    The public debt stock reduced drastically from 2007 after the implementation of MDRI, which the G8 countries pledged in Scotland in 2005 to cancel debts for the most indebted countries.

    The initiative was to provide $3.8 billion relief to Tanzania between 2007 and 2044.

    The external debt declined to $4.9 billion in June 2007, nearly 44 per cent below the stock in June 2006.

    At the end of December 2006, the national debt stood at $7188.2 compared to $8153.7 million at the end of December 2005.

    Additional reporting by Mkinga Mkinga
     
  3. Lunyungu

    Lunyungu JF-Expert Member

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    Na Boniface Meena
    Mwananchi


    WAKATI deni la nje la serikali likiongezeka kwa kasi kati ya Oktoba mwaka jana na Septemba mwaka huu, serikali imesisitiza kuwa haitakoma kukopa kwa kuwa uchumi wa nchi unakua na mahitaji yanaongezeka.

    Madeni ya nje ya serikali yameongezeka na kufikia Sh 12trilioni mwezi Septemba mwaka huu kutoka Sh 9.2 trilioni mwishoni mwa mwezi Oktoba mwaka jana.

    Taarifa ya BoT imeeleza kuwa, deni hilo liliongezeka kwa karibu Sh 3 trilioni katika kipindi hicho mwaka uliopita na kwa kiasi cha Sh 213 bilioni kati ya Septemba na Agosti mwaka huu.

    Katibu Mkuu wa Wizara ya Fedha na Uchumi, Ramadhani Kihijjah alilieleza gazeti hili jana kuwa kutokana na uchumi wa nchi kukua, lengo la serikali ni kukopa zaidi kwa kuwa hata nchi tajiri kama Marekani zinakopa na ndiyo maana uchumi wake unakuwa.

    Alisema hayo baada ya kutiliana saini msaada na mkopo wa Sh 53bilioni kutoka kwa serikali ya Japan kwa ajili ya matengenezo ya awamu ya tatu ya barabara ya Masasi-Mangaka.

    "Kukopa sio tatizo kwa kuwa uchumi wa nchi unakua na hali ya sasa ni nzuri, mahitaji nayo yanaongezeka hivyo ni lazima tuendelee kukopa,"alisema Khijjah.

    Alisema kitendo cha mataifa tajiri kuifutia madeni Tanzania, kinaiongezea nguvu nchi kuendelea kukopa kwa ajili ya maendeleo yake na kwa kuwa uchumi unapanda kutoka asilimia 7 na kutegemewa kukua kwa asilimia 5.

    Kiasi hicho cha fedha kitasaidia kuboresha kilomita 55 za barabara hiyo ambazo zitasaidia kuunganisha Tanzania na nchi ya Msumbiji kupitia daraja la Umoja lililopo mpakani.

    Alisema serikali ya Japan tayari ilishatoa kiasi cha Sh 6.9 bilioni kwa awamu ya kwanza na Sh 8.3 bilioni kwa awamu ya pili ya utengenezwaji wa barabara hiyo.

    Balozi wa Japan nchini, Hiroshi Nakagawa alisema kuwa ni muhimu serikali ikatumia kiasi hicho cha fedha kwa uangalifu ili kuboresha uchumi wa wananchi wa maeneo barabara hiyo inakopita.

    "Ni matumaini yangu serikali itafanya kazi nzuri kwa kutumia msaada na mkopo huu kwa kuwa tumekuwa na ushirikiano mzuri na serikali kwa zaidi ya miaka 45,"alisema Nakagawa.
     
  4. b

    bnhai JF-Expert Member

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    Hii issue ni very tricky. Unaweza kuwa na maswali mengine kuliko majibu. Ukiangalia deni la marekani mwaka huu limevunja rekodi kutokana na mtikisiko wa kiuchumi, Uingereza na Japan pia. Suali linakuwa nani anakopa wapi na anamkopesha nani? Ila kukopa hakukwepeki cha msingi je matumizi yanakuwa sahihi???
     
  5. M

    Mwafrika JF-Expert Member

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    Siku Kikwete (na kilaza wake Mkullo) anaondoka madarakani, nchi itakuwa inadaiwa mabilioni.
     
  6. Tumain

    Tumain JF-Expert Member

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    Halafu wauza pombe fulani wakiingia nchi itakufa kabisaaa acha kudaiwa lol.
     
  7. M

    Mdondoaji JF-Expert Member

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    Mh!! waboje hii statement niliyoweka wino mwekundu naona ka si sahihi vile je unadhani uchumi wa nchi unakua kwa kukopa? Kuwa na legal obligation na kutokuwa na obligation yupi anakuwa na uwezo wa kukua kiuchumi!!! Pia marekani juzi juzi amevunja rekodi ya deni, Uingereza inafatia je unadhani mkopo bila mipango endelevu unalipika??? Duh hii kali mbavu sina
     
  8. M

    Mkandara Verified User

    #8
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    Muhimu zaidi ni kutazama hiyo mikopo imefanya kazi gani?
    Binafsi naamini kabisa mikopo yote inatakiwa kuorodhesha matumizi yake ktk ujenzi wa vyanzo vya kuboresha uzalishaji kwani Uchumi wa nchi unaweza kukua pasipo mikopo..
    Sisi mikopo yetu imejenga au kuboresha vyanzo gani?..
     
  9. Serendipity

    Serendipity JF-Expert Member

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    Dec 4, 2009
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    Hizo hela zote zinazokopwa zinaishia kwenye mifuko ya mafisadi wachache, Serekali inadai uchumi unakuwa! Nashangaa sana, nadhani ni uchumi wa watu wachache walioko kwenye 'system' na wala sio uchumi wa mtanzania wakawaida(ambao ndo tupo wengi!)
     
  10. Rev. Kishoka

    Rev. Kishoka JF-Expert Member

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    BAK,

    Wewe umeniwahi, nimeisoma hii leo nikapandisha povu, nikajiuliwa hivi Wapinzani na Wapiganaji wako wapi?

    This is a 4th time in last 30 months that we hear that the debt is soaring.

    Lakini what else can Mchungaji say about Liwalo Liwe than pushing for PPPT?
     
  11. Rev. Kishoka

    Rev. Kishoka JF-Expert Member

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    By the way BAK, in the last 2 weeks, I read somewhere that TRA has been successful in collecting Kodi.

    Then who is lying?

    Je how much of this debt has ended in Mikono ya Wahujumu?

    But, oofh I forgot, we are building an airport in Sumbawanga to land Ungo!
     
  12. Iteitei Lya Kitee

    Iteitei Lya Kitee JF-Expert Member

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    Dec 4, 2009
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    2009-12-04
    By Samuel Kamndaya

    THE CITIZEN

    A section of the academic community and politicians have described as unacceptable the accumulated national debt presently standing at $9.33 billion (about Sh12 trillion), even as the Government maintains that the amount is sustainable.

    Speaking The Citizen separately yesterday, the critics described the debt as unsustainable and questioned the Government's wisdom in accumulating sit to that level in less than a decade since it was reduced following the implementation of the G8's multilateral debt relief initiative (MDRI).

    "It comes at a time of economic hardships, with the whole world reeling under the economic crisis... the fact that domestic revenues are dwindling and with preparations of next year's General Election under way, it goes without saying that the debt is unsustainable," said Mzumbe University's Dr Honest Ngowi.

    The don said that with the failure of the Tanzania Revenue Authority (TRA) to hit revenue collection targets in the first quarter of 2009/10, the increasing debt poses a huge threat to the economy.

    In the first three months of 2009/10, TRA missed its target by a whopping Sh100 billion, though the Finance and Economic Affairs Minister, Mr Mustafa Mkulo, is saying the situation is normal.

    And, speaking to The Citizen yesterday shortly after representing Tanzania in signing $40 million (about Sh53 billion) Japan aid documents, Treasury Permanent Secretary Ramadhani Khijjah insisted that the debt is still sustainable.

    "It is quite sustainable... it simply shows the economy is growing, since debt is always pegged on the equivalence of the country's GDP," he said, noting, however, that Tanzania still requires a lot of inputs for the economy to be on good footing.

    The BoT's monthly economic reviews (MERs) indicate that the national debt was about $7.1 billion (about Sh9.2 trillion) at the end of October last year, before ballooning to $7.8 billion (about Sh10.1 trillion) in January 2009.

    It soared to $9.33 billion (about Sh12 trillion) in September, as the Government borrowed more from internal sources to fill the gap caused by shortfalls in tax collections.

    The national debt burden, which grew from $1,445 million to $7,972.2 million between 1970 and 1998, was reduced to Sh7.5 trillion in June 2007, following the implementation of the G8's MDRI.

    The new domestic debt increased by nearly four times, from the Sh606.27 billion recorded in September 2008. The total amount of debt incurred during the first nine months of this year stood at nearly $1.6 billion (about Sh2 trillion) and domestic borrowing, Sh492.2 billion.

    But according to Mr Khijjah, the fact that Tanzania was once relieved of its debts does not mean that it should not borrow again since it has development goals to meet.

    "We have a lot of needs, we need to meet the MDGs (Millennium Development Goals) and Mkukuta goals, among others, which together require a lot of funds. We invest the money in building roads and other infrastructure-related sectors... these will spur production of agricultural and industrial products and help to create jobs... in the end we will collect more revenues domestically and repay the debt," said Mr Khijjah.

    But Dr Semboja Haji of the University of Dar es Salaam's Economic Research Bureau shares Dr Ngowi's sentiments that the debt is unsustainable, considering that it can't have been accumulated within a fortnight.

    "Our debts were once cancelled because they were seen as unsustainable. It therefore goes without saying that if the HIPC (Highly Indebted Poor Countries) conditions still apply, then the present huge debt is also unsustainable," said Dr Haji.

    According to the economic guru, a debt only becomes sustainable if it corresponds well with the rate of return.

    "It's a question of how much the country gets in return for activities accrued from sectors into which the debt was invested," argued Dr Haji.

    The Leader Official Opposition in Parliament, Mr Hamad Rashid, wondered whether the borrowed money really goes to development activities or it goes to service blunders made by some government officials.

    "The problem is that part of this money goes to activities that are meant to rectify problems created by some public officials. Our leaders have a serious decision-making problem," he said.

    Citing the IPTL and Dowans issues, Mr Rashid blamed the Government for making economic decisions driven by political considerations.

    "The refusal to purchase Dowans' generators at a cheaper price and clinging to IPTL generators is a clear indication that our leaders' decisions are politically motivated? it is a pity that some of the debts are accumulated this way," he said.

    A senior official at the central bank, however, dispelled fears that the surge in domestic borrowing would limit funding for productive activities.

    "Government borrowing is expected to leave room for credit to the private sector to grow by 30 per cent between now and June 2010 - a comfortable rate by any standard," the BoT director of economic research and policy, Dr Joe Masawe, told The Citizen in a recent interview.

    "Already, interest rates on government securities have fallen substantially, which is expected to crowd the private sector," he added.

    During the last financial year, credit to the private sector grew by 33.2 per cent and reached 40 per cent before the second round effects of the global crunch, which hit Tanzania hard.
     
  13. Bongolander

    Bongolander JF-Expert Member

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    Well, am sure proponents of JK and the team will refuse the accept the fact that they are messing up the economy. The fact that US is borrowing does not justfy borrowing, US know that they only need two or three years to pay back her debt what about us?

    And where is that thing which we were told few years ago... Paris club, WB, IMF and others cancelling our debt, was it just a talk or??

    By the way where did all the money we borrowed go, anything tangible worth even 5 billion dollars? I hope Rev Kishoka has seen a couple.
     
  14. Josh Michael

    Josh Michael JF-Expert Member

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    Na Boniface Meena
    Mwananchi


    WAKATI deni la nje la serikali likiongezeka kwa kasi kati ya Oktoba mwaka jana na Septemba mwaka huu, serikali imesisitiza kuwa haitakoma kukopa kwa kuwa uchumi wa nchi unakua na mahitaji yanaongezeka.

    Madeni ya nje ya serikali yameongezeka na kufikia Sh 12trilioni mwezi Septemba mwaka huu kutoka Sh 9.2 trilioni mwishoni mwa mwezi Oktoba mwaka jana.

    Taarifa ya BoT imeeleza kuwa, deni hilo liliongezeka kwa karibu Sh 3 trilioni katika kipindi hicho mwaka uliopita na kwa kiasi cha Sh 213 bilioni kati ya Septemba na Agosti mwaka huu.

    Katibu Mkuu wa Wizara ya Fedha na Uchumi, Ramadhani Kihijjah alilieleza gazeti hili jana kuwa kutokana na uchumi wa nchi kukua, lengo la serikali ni kukopa zaidi kwa kuwa hata nchi tajiri kama Marekani zinakopa na ndiyo maana uchumi wake unakuwa.

    Alisema hayo baada ya kutiliana saini msaada na mkopo wa Sh 53bilioni kutoka kwa serikali ya Japan kwa ajili ya matengenezo ya awamu ya tatu ya barabara ya Masasi-Mangaka.

    "Kukopa sio tatizo kwa kuwa uchumi wa nchi unakua na hali ya sasa ni nzuri, mahitaji nayo yanaongezeka hivyo ni lazima tuendelee kukopa,"alisema Khijjah.

    Alisema kitendo cha mataifa tajiri kuifutia madeni Tanzania, kinaiongezea nguvu nchi kuendelea kukopa kwa ajili ya maendeleo yake na kwa kuwa uchumi unapanda kutoka asilimia 7 na kutegemewa kukua kwa asilimia 5.

    Kiasi hicho cha fedha kitasaidia kuboresha kilomita 55 za barabara hiyo ambazo zitasaidia kuunganisha Tanzania na nchi ya Msumbiji kupitia daraja la Umoja lililopo mpakani.

    Alisema serikali ya Japan tayari ilishatoa kiasi cha Sh 6.9 bilioni kwa awamu ya kwanza na Sh 8.3 bilioni kwa awamu ya pili ya utengenezwaji wa barabara hiyo.

    Balozi wa Japan nchini, Hiroshi Nakagawa alisema kuwa ni muhimu serikali ikatumia kiasi hicho cha fedha kwa uangalifu ili kuboresha uchumi wa wananchi wa maeneo barabara hiyo inakopita.

    "Ni matumaini yangu serikali itafanya kazi nzuri kwa kutumia msaada na mkopo huu kwa kuwa tumekuwa na ushirikiano mzuri na serikali kwa zaidi ya miaka 45,"alisema Nakagawa.
     
  15. b

    bnhai JF-Expert Member

    #15
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    Pls unachokisema hakina ukweli. Nani kakwambia USA itachukua miaka 2 au 3 kulipa deni lote? Hivi ni lini USA imewahi kukaa bila kuwa na deni? Unajua kuwa USD inaporomoka kiasi kwamba Mataifa yananunua gold kureplace USD inayoporomoka. Umemiskia Berninke akiizungumzia tatizo la uchumi wa marekani. Indicator nyingine ni ajira. Level ya unemployment Marekani inaongezeka kila asubuhi. Wewe unasemaje?

    Now to the point. Km ilivyo kwa stimulus nyingine. Deni linasaidia kusuma uchumi mbele kama tu pesa zitatumika ipasavyo. Mfani ukikopa ukawekeza kwenye miundo mbinu km umeme, barabara na afya, elimu nk. Tunataraji hiyo miundo mbinu itakuwa vichocheo vya ajira, usafiri nk. Upande mwingine vivutio vya uwekezaji in the end mapato yanaongezeka na uchumi ndio unakuwa.
     
  16. BAK

    BAK JF-Expert Member

    #16
    Dec 4, 2009
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    2009-12-04
    By Samuel Kamndaya

    THE CITIZEN

    A section of the academic community and politicians have described as unacceptable the accumulated national debt presently standing at $9.33 billion (about Sh12 trillion), even as the Government maintains that the amount is sustainable.

    Speaking The Citizen separately yesterday, the critics described the debt as unsustainable and questioned the Government's wisdom in accumulating sit to that level in less than a decade since it was reduced following the implementation of the G8's multilateral debt relief initiative (MDRI).

    "It comes at a time of economic hardships, with the whole world reeling under the economic crisis... the fact that domestic revenues are dwindling and with preparations of next year's General Election under way, it goes without saying that the debt is unsustainable," said Mzumbe University's Dr Honest Ngowi.

    The don said that with the failure of the Tanzania Revenue Authority (TRA) to hit revenue collection targets in the first quarter of 2009/10, the increasing debt poses a huge threat to the economy.

    In the first three months of 2009/10, TRA missed its target by a whopping Sh100 billion, though the Finance and Economic Affairs Minister, Mr Mustafa Mkulo, is saying the situation is normal.

    And, speaking to The Citizen yesterday shortly after representing Tanzania in signing $40 million (about Sh53 billion) Japan aid documents, Treasury Permanent Secretary Ramadhani Khijjah insisted that the debt is still sustainable.

    "It is quite sustainable... it simply shows the economy is growing, since debt is always pegged on the equivalence of the country's GDP," he said, noting, however, that Tanzania still requires a lot of inputs for the economy to be on good footing.

    The BoT's monthly economic reviews (MERs) indicate that the national debt was about $7.1 billion (about Sh9.2 trillion) at the end of October last year, before ballooning to $7.8 billion (about Sh10.1 trillion) in January 2009.

    It soared to $9.33 billion (about Sh12 trillion) in September, as the Government borrowed more from internal sources to fill the gap caused by shortfalls in tax collections.

    The national debt burden, which grew from $1,445 million to $7,972.2 million between 1970 and 1998, was reduced to Sh7.5 trillion in June 2007, following the implementation of the G8's MDRI.

    The new domestic debt increased by nearly four times, from the Sh606.27 billion recorded in September 2008. The total amount of debt incurred during the first nine months of this year stood at nearly $1.6 billion (about Sh2 trillion) and domestic borrowing, Sh492.2 billion.

    But according to Mr Khijjah, the fact that Tanzania was once relieved of its debts does not mean that it should not borrow again since it has development goals to meet.

    "We have a lot of needs, we need to meet the MDGs (Millennium Development Goals) and Mkukuta goals, among others, which together require a lot of funds. We invest the money in building roads and other infrastructure-related sectors... these will spur production of agricultural and industrial products and help to create jobs... in the end we will collect more revenues domestically and repay the debt," said Mr Khijjah.

    But Dr Semboja Haji of the University of Dar es Salaam's Economic Research Bureau shares Dr Ngowi's sentiments that the debt is unsustainable, considering that it can't have been accumulated within a fortnight.

    "Our debts were once cancelled because they were seen as unsustainable. It therefore goes without saying that if the HIPC (Highly Indebted Poor Countries) conditions still apply, then the present huge debt is also unsustainable," said Dr Haji.

    According to the economic guru, a debt only becomes sustainable if it corresponds well with the rate of return.

    "It's a question of how much the country gets in return for activities accrued from sectors into which the debt was invested," argued Dr Haji.

    The Leader Official Opposition in Parliament, Mr Hamad Rashid, wondered whether the borrowed money really goes to development activities or it goes to service blunders made by some government officials.

    "The problem is that part of this money goes to activities that are meant to rectify problems created by some public officials. Our leaders have a serious decision-making problem," he said.

    Citing the IPTL and Dowans issues, Mr Rashid blamed the Government for making economic decisions driven by political considerations.

    "The refusal to purchase Dowans' generators at a cheaper price and clinging to IPTL generators is a clear indication that our leaders' decisions are politically motivated? it is a pity that some of the debts are accumulated this way," he said.

    A senior official at the central bank, however, dispelled fears that the surge in domestic borrowing would limit funding for productive activities.

    "Government borrowing is expected to leave room for credit to the private sector to grow by 30 per cent between now and June 2010 - a comfortable rate by any standard," the BoT director of economic research and policy, Dr Joe Masawe, told The Citizen in a recent interview.

    "Already, interest rates on government securities have fallen substantially, which is expected to crowd the private sector," he added.

    During the last financial year, credit to the private sector grew by 33.2 per cent and reached 40 per cent before the second round effects of the global crunch, which hit Tanzania hard.
     
  17. Mpita Njia

    Mpita Njia JF-Expert Member

    #17
    Dec 4, 2009
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    Unayosema ni kweli hasa ukizingatia kuwa deni limekuwa kwa kasi ya ajabu. baada ya HIPC tulibakiwa na deli la kama dola mil 4, lakini kwa miaka hii minne deni limefika dola mil 9. Ni lazima kujiulza fedha hizi zimefanya nini/ Hicho kilichofanyijka kina thamani ya fedha tuliyokopa?
     
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