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Government in cash crisis, says Kikwete

Discussion in 'Jukwaa la Siasa' started by erfan, Feb 7, 2012.

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    erfan Member

    Feb 7, 2012
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    President Jakaya Kikwete has said Tanzania’s government has experienced serious financial difficulties in the recent past, revealing it was overwhelmed by debts.

    Speaking in Dar es Salaam on the occasion to mark law day, the president confirmed that almost all government departments received less than the budget allocation for the first half of the 2011/2012 financial year.

    “The first six months of this financial year have been very tricky as the government embarked on clearing its huge debts, forcing the treasury to disburse very little money to other departments” he said.

    Without clarifying the kind of debts it was paying, the president however noted that most of it had been cleared and that the government will start honouring the outstanding departmental budget allocations promptly.

    His explanation came in response to a statement by Chief Justice, Mohamed Chande Othman who said the judiciary had run out of money as the government failed to disburse its full allocation.

    The CJ said the judiciary received only Sh6.32billion (Ksh332m) between July and December, 2011 instead of Sh10 billion set for the judiciary fund in the first half of the 2011/2012 fiscal year. At least Sh20 billion was allocated to the judiciary for the entire fiscal year.

    “This budget constraint derails judicial activities and in turn affects provision of justice to the public,” said the CJ.

    In response, the president said the government will ensure that the judiciary received its due share of the budget wholesome in future.

    The liquidity problem has seen delays in payment of civil servants’ salaries, disbursement of subsidies to political parties and paying for a wide range of other services, including money meant for projects and local government.