How will the govt plug budget hole left by donors?
Dar es Salaam. Government funding of critical projects and programmes could be disrupted following the decision by key donors to withhold $558 million (about Sh950 billion) in budget support over corruption concerns.
Ms Sinikka Antila, Finnish ambassador and development partners chairperson PHOTO | FILE
Plans for the referendum on the proposed new constitution, bio-metric voter registration kits (BVRs) and preparations for the local government elections slated for December are some of the government undertakings that could be affected.
Others are the ongoing issuance of the national identity cards (IDs), preparations for the 2015 General Election and the rollout of projects in the health, infrastructure, energy and education sectors. A huge chunk of the donor money is usually directed at the social sectors.
The donors have said they will release the funds factored in the 2014/15 Budget upon seeing—and being satisfied with—the outcome of the investigations into the controversial payments of Sh201 billion of Independent Power Tanzania Ltd (IPTL) escrow monies to Pan Africa Power Solutions Tanzania Ltd (PAP).
As a result, concern is mounting that the action by the donor group – comprising Finland, Sweden, Denmark, the European Commission, Ireland, Germany, Britain, Norway, Canada, Japan, the World Bank and the African Development Bank to withhold funding – could seriously impact on the smooth government operations. According to Ms Kati Manner, head of cooperation at the Finnish Embassy in Dar es Salaam, only $69 million (Sh110 billion) has been released to the Treasury so far.
The government is yet to give the NEC Sh290 billion it requested to buy BVRs for the overhaul of voter register. This has forced the electoral body to push back the registration from September to December.
Principal secretary for Finance Servacius Likwelile told The Citizen recently that the government had only released Sh21.5 billion out of the approved budget of Sh133 for the NEC project. Pressure will mount with the declared interest for a referendum ahead of the 2015 polls.
Other sources within the diplomatic community, who sought anonymity, informed The Citizen that matters would be complicated further as the US was also contemplating to suspend the final approval of some $700 million for Tanzania under the Millennium Challenge Compact (MCC-II) funding over the same IPTL scandal.
The Citizen exclusively reported last week how the donors have tied their commitment to the outcome of the investigation by the controller and auditor general on the IPTL sale deal. The Citizen also exclusively revealed that the IPTL scandal which involved a Kenyan businessman who took control of the power company under questionable circumstances.
Economic analysts who spoke to The Citizen said news on the embargo and the possibility of a delay in securing the MCC funding, could deal a blow to fulfilment of government budget pledges.
They said even though the Tanzania Revenue Authority (TRA) was on target in tax collection, it won’t meet the huge gap. TRA commissioner general Rished Bade said in an interview that the authority managed to collect in July and August this year a total of Sh1.5 trillion out of the targeted Sh1.6 trillion. “I am optimistic the authority will meet the targeted revenue for the year,” said Mr Bade.
Prof Humphrey Moshi of the Economics Department at the University of Dar es Salaam told The Citizenthat the country’s economy would suffer consequences due to mismanagement and corruption.
The Citizen
Dar es Salaam. Government funding of critical projects and programmes could be disrupted following the decision by key donors to withhold $558 million (about Sh950 billion) in budget support over corruption concerns.
Ms Sinikka Antila, Finnish ambassador and development partners chairperson PHOTO | FILE
Plans for the referendum on the proposed new constitution, bio-metric voter registration kits (BVRs) and preparations for the local government elections slated for December are some of the government undertakings that could be affected.
Others are the ongoing issuance of the national identity cards (IDs), preparations for the 2015 General Election and the rollout of projects in the health, infrastructure, energy and education sectors. A huge chunk of the donor money is usually directed at the social sectors.
The donors have said they will release the funds factored in the 2014/15 Budget upon seeing—and being satisfied with—the outcome of the investigations into the controversial payments of Sh201 billion of Independent Power Tanzania Ltd (IPTL) escrow monies to Pan Africa Power Solutions Tanzania Ltd (PAP).
As a result, concern is mounting that the action by the donor group – comprising Finland, Sweden, Denmark, the European Commission, Ireland, Germany, Britain, Norway, Canada, Japan, the World Bank and the African Development Bank to withhold funding – could seriously impact on the smooth government operations. According to Ms Kati Manner, head of cooperation at the Finnish Embassy in Dar es Salaam, only $69 million (Sh110 billion) has been released to the Treasury so far.
The government is yet to give the NEC Sh290 billion it requested to buy BVRs for the overhaul of voter register. This has forced the electoral body to push back the registration from September to December.
Principal secretary for Finance Servacius Likwelile told The Citizen recently that the government had only released Sh21.5 billion out of the approved budget of Sh133 for the NEC project. Pressure will mount with the declared interest for a referendum ahead of the 2015 polls.
Other sources within the diplomatic community, who sought anonymity, informed The Citizen that matters would be complicated further as the US was also contemplating to suspend the final approval of some $700 million for Tanzania under the Millennium Challenge Compact (MCC-II) funding over the same IPTL scandal.
The Citizen exclusively reported last week how the donors have tied their commitment to the outcome of the investigation by the controller and auditor general on the IPTL sale deal. The Citizen also exclusively revealed that the IPTL scandal which involved a Kenyan businessman who took control of the power company under questionable circumstances.
Economic analysts who spoke to The Citizen said news on the embargo and the possibility of a delay in securing the MCC funding, could deal a blow to fulfilment of government budget pledges.
They said even though the Tanzania Revenue Authority (TRA) was on target in tax collection, it won’t meet the huge gap. TRA commissioner general Rished Bade said in an interview that the authority managed to collect in July and August this year a total of Sh1.5 trillion out of the targeted Sh1.6 trillion. “I am optimistic the authority will meet the targeted revenue for the year,” said Mr Bade.
Prof Humphrey Moshi of the Economics Department at the University of Dar es Salaam told The Citizenthat the country’s economy would suffer consequences due to mismanagement and corruption.
The Citizen
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