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`Foreign aid dependency dangerous`
2008-03-18 09:40:44
By Correspondent Felister Peter
OverdependencY on foreign aid for development and recurrent expenditures has been cited as a major obstacle for the country`s macroeconomic growth and speedy development progress.
Tanzania depends on external aid by over 40 percent of its budget.
Speaking in Dar es Salaam yesterday, Prof. Amon Mbelle of the University of Dar es Salaam said there was a need for Tanzania to establish its own expanded domestic revenue base so as to strengthen the capacity of the economy to grow.
Prof Mbelle, who was presenting a paper on Economic Governance and Management at a workshop organized by African Peer Review Mechanism (APRM), said an expanded domestic revenue base would develop the private sector which he said was still small and dormant.
The government has increased tax base in this financial year and currently it is collecting over 300bn/- revenue per month.
Prof Mbelle said Tanzania would hardly attain its targets in poverty reduction as most of its development plans were characterized by long term vision.
He cited the National Strategy for Growth and Reduction of Poverty (NSGRP) which is geared for 2025 and the Tanzania Mini- Tiger Plan for 2020 that are placed in the long term visions, hence delaying development.
Prof Mbelle said efforts were also needed to combat corruption and money laundering, adding that the problem had currently increased.
``Money laundering hurts the formal economy, social justice and tends to erode the authority of legitimate governments,`` he said.
He said the source of money laundering in Tanzania was its economy being cash dominated, whereby most business activities were conducted in cash rather than by cheque.
He said the liberty policy on Foreign Direct Investment (FDIs) whereby the source of funds brought into the country by inward investors was not effectively scrutinized was another source of money laundering.
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