East Africa state Tanzania will break the bank and splash the cash when it seeks to raise its spending by 7 per cent, taking its budget to 31.69 trillion shillings ($14.23 billion) in its 2017/18 (July-June) fiscal year. The Ministry of Finance alleged the information in a draft budget proposal.
“Some of the flagship infrastructure projects being implemented by the government include construction of a standard gauge railway network,” Finance and Planning Minister Philip Mpango said, adding the project will be allocated 800 billion shillings.
Mpango said that out of planned development expenditure of 11.8 trillion shillings this fiscal year; only 3.97 trillion shillings had been spent by February due to delays in receiving loans and grants from external sources.
The government said it was forced to hold back plans to tap international credit markets for financing of infrastructure projects over the past year due to high borrowing costs.
He said the government plans to lower the budget deficit to 3.8 percent of gross domestic product in the next fiscal year, from an estimated 4.5 percent of GDP this fiscal year.
Mpango said the government plans to borrow 6.15 trillion shillings from domestic sources.
“In order to speed up implementation of infrastructure projects, the government expects to borrow 1.59 trillion shillings from external commercial lenders,” he said.
Investors have been unnerved by unpredictable policies from the government of President John Magufuli while private sector credit growth has been hampered by a steep drop in the money supply and a spike in non-performing loans.
Tanzania, which is East Africa’s second-biggest economy, has stepped up spending in recent years to build a standard gauge railway and new roads and expand its ports.