THE government has said the economy is well on track, while it plans to spend 15tri/- equivalent to 36.2 per cent of the total 2022/2023 national budget to service development projects, including the projects on social service provision.
Presenting the State of the National Economic Survey Report for 2021 and the 2022/23 National Development Plan, Minister for Finance and Planning, Dr Mwigulu Nchemba said out of the allocated money, 12.3tri/- (about 82.0 per cent of the development budget) would be sourced from internal revenue sources, while 2.7tri/- equivalent to 18.0 per cent of the development budget will be sources from foreign sources.
“In intensifying the participation of the private sector as an important engine to the national economy, the government will make sure that all development projects attracting investors are implemented through joint ventures under Special Purpose Vehicle as well as through Public Private Partnership (PPP),” he noted. Regarding the state of the national economy for 2021, the minister said the country’s economy grew by 4.9 per cent compared to 4.8 per cent growth during the corresponding period in 2020.
He attributed the growth of the economy to different efforts currently being undertaken by the government including the implementation of the development plan for the country and the fight against Covid-19 pandemic.
The minister attributed the growth to a strategic investment especially in energy infrastructure, water, health, education, roads construction, railway and airports.
Different economic activities which recorded steady growth in 2021 include Arts and entertainment (19.4 per cent), electricity (10.0 per cent), mining (9.6 per cent) and Information and Communications (9.1 per cent).
Minister Nchemba told the House that the country’s Gross Domestic Product (GDP) growth in 2021 grew to 161.5tri/- compared to 151.2tri/- that was recorded during the corresponding period in 2020.
He said the Economic Survey Report for 2021 and the 2022/23 National Development Plan was prepared taking into consideration trends of macroeconomic indicators and various sector in 2021, compared to 2020.
It is also based on the priorities of the government, as outlined in the Third Five Year Development Plan (FYDP III) 2021/22 – 2025/26, ruling party CCM Manifesto 2020-2025 and President Samia Suluhu Hassan’s address to the 12th Parliament on April 22, 2021.
According to the minister, in improving revenue collection measures to service the 2022/23 plan, the government would continue to supervise collections on both tax and non-tax revenue from different sources by taking different measures including making sure that businesspersons are providing electronic receipt as well as intensifying massive tax education campaigns.
Others include, intensifying Compliance Risk Management Plan and friendly voluntary tax compliance and cooperating with security machineries in protecting smuggling through different border points, ports and airports, among others.
Dr Nchemba further said during implementation of the National Development Plan for 2022/23, high priority will be accorded to productive sectors which are agriculture, livestock, fisheries and energy which stimulates production for domestic consumption and exports, reducing trade balance deficit, inflation and generate employment opportunities to majority people. He said the government will continue to prioritise execution of the key flagship projects, which are those deemed critical on the basis of their large positive multiplier effects to the rest of the economy, particularly for the areas that can catalyse the aspired transition towards a competitive led export economy.
It is anticipated that their implementation will yield clear, and in some cases rapid tangible positive results in relation to the set objectives and targets of the FYDP III.
Among key flagship projects that will be highly prioritised according to Dr Nchemba include the Standard Gauge Railway (SGR), 2,115MW Julius Nyerere Hydropower Project (JNHPP) and improving the Air Tanzania Company Limited (ATCL). Others are the Liquefied Natural Gas (LNG) project in Lindi Region, East African Crude Oil Pipeline (EACOP), Mchuchuma and Liganga projects, Ruhudji and Rumakali hydropower projects in Njombe Region with the capacity to produce 358MW and 222MW of electricity and JPM Bridge at Kigongo Busisi in Mwanza Region. The list also has construction of major roads and bridges as well as developing all Special Economic Zones including the Bagamoyo Special Economic Zone (BSEZ), as well as a special programme to develop rare skills.
According to the FYDP III, the choice of these projects is based on their ability to cultivate and sustain a national system of competitiveness that leads to accelerated export orientation and diversification, economic growth, and inclusive human development.
The projects require high capital investments. Beside the possible direct monetary gains, the return of these projects can be very high in form of wider sector effects – reduced costs of production, faster access to domestic and hitherto untapped regional markets and enabling the country to fully exploit its geographical location advantage.
The projects offer multiple income generation projects and others ‘enabling’ – investment, employment, improved welfare and expanding tax base.
He said inflation has continued to remain within target of 3 to 5 per cent. In 2021, annual inflation rate increased to an average of 3.7 per cent, compared to an average of 3.3 percent in 2020.
In addition, inflation rate increased to an average of 3.8 per cent in April 2022 compared to 3.3 per cent in April 2021.
The rise in inflation was a result of reasons beyond the government control including disruptions in the production and distribution chains of goods and services in the world market as a result of the Russia – Ukraine war