The government is expected to spend over USD10bn during the 2012/2013 financial year to be tabled today, where USD3.3bn is to be directed to capital investments, but over 40 percent of the latter will go to debt servicing.
Finance and Economic Affairs Minister Dr William Mgimwa said this in Dar es Salaam last week besides mentioning the priorities of the proposed budget as infrastructure, agriculture, development of industries, development of human resources and social services, tourism, development of domestic and external business and development of financial services.
This year’s budget will not be so different from that of 2011/2012 where Energy, water and infrastructure were top priority.
The budget proposal was presented to the Parliamentary Finance and Economy Affairs Committee which is headed by Bariadi East MP (CCM) Andrew Chenge. Discussions on the budget continue on Tuesday.
For his part, the Shadow Finance minister, Zitto Kabwe, has expressed concern over the mounting national debt which has climbed from USD4.6bn in 2009 to USD15bn in March, this year, prompting the government to spend much of the proposed 2012/13 budget to service it.
Kabwe, who is also Kigoma North lawmaker (Chadema), said in a statement early this week that the government has proposed to spend USD2bn to service the debt which is equivalent to 21 per cent of the total budget.
"The cost of servicing the national debt is the largest budget item in the proposed 2012/13 budget at USD2bn which is equal to 34 per cent of the whole budget for recurrent expenditure.
The country's spiralling debt is driving the nation into bankruptcy," he cautioned.
The government tables its budget proposals for the 2012/13 fiscal year in Parliament today in Dodoma. Kabwe said, other areas of concern in the proposed budget include inflation which is largely contributed by food and energy prices at 56.7 per cent of the basket of goods and services with an inflation rate of 27 per cent.
He also invited ideas on how to tackle unemployment especially of youth which is a great challenge because despite the country's economic growth, the situation has not shown any trickledown effect or translated into enough jobs.
"We also need to reduce the current account deficit by cutting down on imports and increasing exports. Statistics shows that by the year ending March 2012, Tanzania’s import bill totalled USD12.6bn, while exports were a mere USD6.9bn," he said.
He pointed out that the current account deficit stands at USD5.2bn while the tourism and transport sectors have the potential of being even bigger foreign currency earners and the proposed gas fired electricity generation would also help cut down imports.