Tanzania’s 2024/2025 Budget by the Ministry of Construction

Revenue and Expenditure

Revenue:

• The Ministry of Construction was allocated TZS 48,395,392,000 for recurrent expenditure.
• TZS 1,419,843,057,000 was allocated for development projects.

Expenditure:

• Out of the allocated TZS 48,395,392,000 for recurrent expenditure, TZS 43,958,274,000 was for salaries and TZS 4,437,118,000 for other expenditures.
• By April 2024, TZS 48,665,781,258.75 had been released, with TZS 46,307,923,275.52 for salaries and TZS 2,357,857,983.23 for other expenditures.
• For development projects, TZS 1,417,143,257,000 was available after reallocating TZS 2,699,800,000 to the Ministry of Transport.

Achievements in Budget Implementation

• Project Implementation: Significant progress in infrastructure projects, including roads, bridges, and ferries. For example, procurement of new ferries and maintenance of ferry infrastructure was ongoing .
• Revenue Collection: Successful collection of TZS 662,508,672,160 by April 2024, which is 77% of the annual budget .
• Quality Control: Inspection and quality assurance of 562 projects using internal and external experts, ensuring value for money .
• Improvement in Road Usage Compliance: Reduced overloading of vehicles from 0.48% to 0.26%, generating revenue from road damage fees and abnormal load permits .

Challenges in Budget Implementation

• Financial Allocation: While funds were allocated, the disbursement process faced delays, affecting timely project execution.
• Local Contractor Participation: Enhancing the capacity and participation of local contractors in major projects remained a challenge, though measures were being taken to improve this .
• Regulatory Adjustments: Continuous adjustments in procurement regulations were needed to facilitate smoother project implementation and better inclusion of local contractors .

Projects Successfully Implemented in 2023/2024 through the Budget

1. Road and Bridge Projects:
   • Main and Regional Roads: The Ministry of Construction through TANROADS managed 37,225.71 kilometers of roads, including 12,336.02 kilometers of main roads and 24,889.69 kilometers of regional roads.
   • Asphalt Roads: Construction of 350 kilometers of asphalt roads and rehabilitation of 25 kilometers of asphalt roads.
   • Bridges: Continued construction of 13 bridges.
2. Infrastructure Development:
   • Strategic Road Projects: Development of strategic roads aimed at economic enhancement, including tourism, agriculture, mining, ports, and industrial areas.
   • Urban Congestion Reduction: Projects to reduce congestion in major cities such as Dar es Salaam, Arusha, Mwanza, Mbeya, and Dodoma.
   • Provincial Connections: Construction of roads connecting regional capitals and neighboring countries with asphalt, including defense roads.
3. New Road Designs:
   • Designing new urban roads considering the needs of all road users, including pedestrians, cyclists, and non-motorized vehicles.
4. Airport Projects:
   • Completion of airport projects in Msalato, Geita, Kigoma, Tabora, Songwe, Mtwara, Sumbawanga, Shinyanga, Iringa, Musoma, Songea, Tanga, and Lake Manyara.
5. Road Safety Projects:
   • Construction of weighbridges, bypass roads, and pedestrian paths to enhance road safety.
6. Revenue Collection:
   • Successfully collected TZS 662,508,672,160 by April 2024, which is 77% of the annual budget.
7. Quality Assurance:
   • Inspection and quality control of 562 projects using internal and external experts to ensure value for money.
8. Vehicle Overloading Control:
   • Reduced vehicle overloading from 0.48% to 0.26%, generating revenue from road damage fees and abnormal load permits​​.

2024/2025 Budget in Terms of Revenue and Expenditure

Revenue

The Ministry of Construction's budget for the 2024/2025 financial year is designed to align with various national development strategies, including the National Development Vision 2025, the Third National Five-Year Development Plan (2021/22 – 2025/26), and the 2020 CCM Election Manifesto. The key areas of revenue consideration are:

• Internal Funds: TZS 1,141,803,989,000 from internal sources.
• External Funds: TZS 546,084,725,000 from external sources.

Expenditure

The total budget requested for the 2024/2025 financial year amounts to TZS 1,769,296,152,000, divided as follows:

1. Recurrent Expenditure:
   • Total Allocation: TZS 81,407,438,000
   • Salaries: TZS 76,588,233,000
   • Other Recurrent Expenditures: TZS 4,819,205,000
2. Development Expenditure:
   • Total Allocation: TZS 1,687,888,714,000
   • Internal Development Funds: TZS 1,141,803,989,000, including TZS 599,756,467,800 from the Road Fund and TZS 542,047,521,200 from the main government fund.
   • External Development Funds: TZS 546,084,725,000

Key Priorities

The 2024/2025 budget focuses on several priority areas, including:

• Repair of Infrastructure: Maintenance of roads and bridges damaged by El Nino rains and Cyclone Hidaya.
• Strategic Road Projects: Construction and continuation of roads that open economic opportunities such as tourism, agriculture, mining, ports, and industrial zones.
• Urban Congestion Reduction: Projects to reduce congestion in major cities including Dar es Salaam, Arusha, Mwanza, Mbeya, and Dodoma.
• Provincial and International Connections: Construction of roads connecting regional capitals and neighboring countries with asphalt standards, including defense roads.
• New Road Designs: Designing new urban roads considering the needs of all users, including athletes, pedestrians, and non-motorized vehicles.
• Airport Projects: Completion of various airport projects across the country.
• Road Safety Projects: Construction of weighbridges, bypass roads, and pedestrian paths to enhance road safety.
• Capacity Building: Strengthening the capacity of local experts to manage large projects.
• ICT Systems: Enhancing ICT systems for improved performance.
• Cost-effective Technologies: Implementing cost-effective road construction technologies, especially in challenging areas.
• TEMESA Transformation: Implementing the 2024-2034 strategy to strengthen TEMESA’s operations.

Potential Challenges in Implementing the 2024/2025 Budget Based on the 2023/2024 Performance

1. Delayed Financial Disbursement:
   • 2023/2024 Issue: In 2023/2024, there were delays in the disbursement of allocated funds, affecting timely project execution.
   • 2024/2025 Impact: If similar delays occur, projects essential for economic growth, such as infrastructure developments and strategic road projects, could be stalled, potentially slowing down economic progress.
2. Revenue Collection Challenges:
   • 2023/2024 Figures: The ministry successfully collected TZS 662,508,672,160 by April 2024, which was 77% of the annual budget.
   • 2024/2025 Targets: With a budget of TZS 1,769,296,152,000, meeting the revenue targets is crucial. If revenue collection falls short, it may lead to budget deficits, impacting planned projects and economic initiatives.
3. Infrastructure Damage and Maintenance Costs:
   • 2023/2024 Events: The budget had to address infrastructure repairs due to El Nino rains and Cyclone Hidaya.
   • 2024/2025 Concerns: Similar or new natural disasters could lead to unplanned expenditures, diverting funds from other critical projects, thus affecting the overall economic growth plan.
4. Local Contractor Participation:
   • 2023/2024 Challenge: Enhancing the capacity and participation of local contractors in major projects was a significant issue.
   • 2024/2025 Potential: If this issue persists, it might hinder the efficiency and timely completion of projects. Moreover, insufficient local contractor involvement could limit the domestic economic benefits of infrastructure projects.
5. Regulatory Adjustments:
   • 2023/2024 Adjustments: Continuous adjustments in procurement regulations were needed for smoother project implementation.
   • 2024/2025 Outlook: Failure to streamline these regulations can cause delays and inefficiencies in project execution, potentially impacting economic growth negatively.
6. Strategic Road and Airport Projects:
   • 2023/2024 Achievements: Significant progress in road and airport projects.
   • 2024/2025 Budget: With a large portion of the budget dedicated to these projects, any delay or inefficiency could directly affect economic growth by hampering connectivity and trade facilitation.
7. Capacity Building and Technology Implementation:
   • 2023/2024 Initiatives: Focus on enhancing local expert capacity and implementing cost-effective technologies.
   • 2024/2025 Needs: Continued investment in these areas is necessary. Failure to do so might result in reliance on expensive foreign expertise and technologies, reducing the overall cost-effectiveness and sustainability of projects.

Economic Growth Considerations with Figures:

• 2023/2024 Budget Utilization:
  • Recurrent Expenditure Allocation: TZS 48,395,392,000
  • Development Expenditure Allocation: TZS 1,419,843,057,000
• 2024/2025 Budget Allocation:
  • Recurrent Expenditure Allocation: TZS 81,407,438,000
  • Development Expenditure Allocation: TZS 1,687,888,714,000

Given the increased budget for 2024/2025, efficient and timely disbursement and utilization of these funds are paramount. The anticipated economic growth heavily relies on the successful implementation of infrastructure projects, improved revenue collection, and the enhanced capacity of local contractors and experts.

Potential Impact on Economic Growth:

• Infrastructure Development: Timely and efficient infrastructure development can significantly boost trade, reduce transportation costs, and improve market accessibility, directly contributing to GDP growth.
• Employment: Successful implementation of projects can create jobs, thus increasing household incomes and stimulating economic activities.
• Revenue Generation: Improved road safety and reduced vehicle overloading can generate additional revenue through road damage fees and abnormal load permits, which can be reinvested in further development projects.