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State budgetary operations record Sh90 billion deficit
By Florian Kaijage
15th September 2012
The perennial imbalance between revenue collection and government expenditure has persisted in the new fiscal year 2012/2013 as a burgeoning deficit of Sh90 billion was recorded in government budgetary operations for July, the first month.
This observation is contained in the Monthly Economic Review published recently by the Bank of Tanzania (BoT).
"During July 2012, total resources on cheques issued basis, amounted to Sh782.9 billion while total expenditure was Sh 539.5 billion, underlining an overall budget deficit after adjustment to cash and expenditure float of Sh 90.0 billion. The deficit was financed through both domestic and foreign sources," the report stated.
The monthly report indicated that total monthly domestic revenue collection, with exclusion of revenue of Local Government Authorities, was 8.2 percent less than the target, occasioned mainly by tax revenue as it failed to reach the target by 5.1 percent.
"Revenue excluding Local Government Authorities (LGAs) own sources stood at Sh 576.2 billion, equivalent to 91.8 percent of the target. The outturn was associated with underperformance in taxes on imports mainly due to the tendency of importers to postpone importation in anticipation of new tax measures in the new fiscal year. Tax revenue amounted to TZS 546.2 billion, 5.1 percent below the target and non-tax revenue was Sh 30.0 billion. Grants amounted to TZS 206.8 billion, compared to Sh 178.8 billion projected for the month.
As a result the government had to find an alternative to bridge the gap as stated in the report: "Government budgetary operations for the month resulted in an overall deficit of Sh90 billion. The deficit was financed by net foreign loans of Sh67 billion and net domestic borrowing of Sh23 billion," the central bank elaborated.
On government expenditure, the BoT report shows that total expenditure for the month was lower by over 50 percent as it stood at Sh539.5 billion, comprising recurrent expenditure amounting to Sh424.8 billion and development expenditure of Sh114.7 billion, with the deficit felt by all ministries and departments.
"This was against the estimated expenditure of Sh1,116.2 billion for July 2012. The lower than estimated expenditure, under other recurrent and development expenditure is consistent with the process of appropriation of funds by Ministries, Departments and Agencies (MDAs) at the beginning of a financial year," the report affirmed.
However the report indicates the contrary in relation to salaries and wages which consumed Sh2.2 billion higher than the original estimates. The actual amount spent on salaries and wages was Sh314.6 billion as opposed to the estimated Sh312.4 billion.
Inflation
The report says annual headline inflation rate for July 2012 eased to 15.7 percent compared to 17.4 percent recorded in June 2012.
"The change was driven by a decline in prices of food items along with housing, water, electricity, gas and other fuel. Month-to-month headline inflation remained at 0.1 percent in July 2012 as it was in June 2012," it stated.
It added: "Annual inflation for food and non-alcoholic beverages declined to 20.8 percent in July 2012 from 23.5 percent recorded in June 2012. Month-to-month food inflation was negative 0.5 percent in July 2012 compared with negative 0.4 percent in June 2012."
It explained further: "Annual inflation excluding food and energy (proxy for core inflation sources) was 8.8 percent in July 2012, same level as recorded in June 2012. However, the month-to-month rate was 0.7 percent in July 2012 compared to 0.5 percent in June 2012."
The fresh figures on inflation are expected to be issued by the National Bureau of Statistics (NBS) expected to issue monthly statistics on Monday, September 17th.
The figures are issued on 15th day of every month except when that date falls on non-working day, in which case the issuance of figures is moved to the next working day.
SOURCE: THE GUARDIAN
By Florian Kaijage
15th September 2012
The perennial imbalance between revenue collection and government expenditure has persisted in the new fiscal year 2012/2013 as a burgeoning deficit of Sh90 billion was recorded in government budgetary operations for July, the first month.
This observation is contained in the Monthly Economic Review published recently by the Bank of Tanzania (BoT).
"During July 2012, total resources on cheques issued basis, amounted to Sh782.9 billion while total expenditure was Sh 539.5 billion, underlining an overall budget deficit after adjustment to cash and expenditure float of Sh 90.0 billion. The deficit was financed through both domestic and foreign sources," the report stated.
The monthly report indicated that total monthly domestic revenue collection, with exclusion of revenue of Local Government Authorities, was 8.2 percent less than the target, occasioned mainly by tax revenue as it failed to reach the target by 5.1 percent.
"Revenue excluding Local Government Authorities (LGAs) own sources stood at Sh 576.2 billion, equivalent to 91.8 percent of the target. The outturn was associated with underperformance in taxes on imports mainly due to the tendency of importers to postpone importation in anticipation of new tax measures in the new fiscal year. Tax revenue amounted to TZS 546.2 billion, 5.1 percent below the target and non-tax revenue was Sh 30.0 billion. Grants amounted to TZS 206.8 billion, compared to Sh 178.8 billion projected for the month.
As a result the government had to find an alternative to bridge the gap as stated in the report: "Government budgetary operations for the month resulted in an overall deficit of Sh90 billion. The deficit was financed by net foreign loans of Sh67 billion and net domestic borrowing of Sh23 billion," the central bank elaborated.
On government expenditure, the BoT report shows that total expenditure for the month was lower by over 50 percent as it stood at Sh539.5 billion, comprising recurrent expenditure amounting to Sh424.8 billion and development expenditure of Sh114.7 billion, with the deficit felt by all ministries and departments.
"This was against the estimated expenditure of Sh1,116.2 billion for July 2012. The lower than estimated expenditure, under other recurrent and development expenditure is consistent with the process of appropriation of funds by Ministries, Departments and Agencies (MDAs) at the beginning of a financial year," the report affirmed.
However the report indicates the contrary in relation to salaries and wages which consumed Sh2.2 billion higher than the original estimates. The actual amount spent on salaries and wages was Sh314.6 billion as opposed to the estimated Sh312.4 billion.
Inflation
The report says annual headline inflation rate for July 2012 eased to 15.7 percent compared to 17.4 percent recorded in June 2012.
"The change was driven by a decline in prices of food items along with housing, water, electricity, gas and other fuel. Month-to-month headline inflation remained at 0.1 percent in July 2012 as it was in June 2012," it stated.
It added: "Annual inflation for food and non-alcoholic beverages declined to 20.8 percent in July 2012 from 23.5 percent recorded in June 2012. Month-to-month food inflation was negative 0.5 percent in July 2012 compared with negative 0.4 percent in June 2012."
It explained further: "Annual inflation excluding food and energy (proxy for core inflation sources) was 8.8 percent in July 2012, same level as recorded in June 2012. However, the month-to-month rate was 0.7 percent in July 2012 compared to 0.5 percent in June 2012."
The fresh figures on inflation are expected to be issued by the National Bureau of Statistics (NBS) expected to issue monthly statistics on Monday, September 17th.
The figures are issued on 15th day of every month except when that date falls on non-working day, in which case the issuance of figures is moved to the next working day.
SOURCE: THE GUARDIAN
