Budget Execution Challenges and Economic Growth in Tanzania with a Focus on Industry and Trade for the Fiscal Year 2024/2025

Significant Budget Increase:

• 2023/2024 Budget:
  • Total Approved: TZS 92,348,837,623
  • Ordinary Expenditures: TZS 66,698,567,623 (Salaries: TZS 57,443,610,685, Other Charges: TZS 9,254,956,938)
  • Development Expenditures: TZS 25,650,270,000
• 2024/2025 Budget Request:
  • Total Requested: TZS 110,899,722,000 (an increase of TZS 18,550,884,377)
  • Ordinary Expenditures: TZS 81,115,206,000 (Salaries: TZS 68,352,946,000, Other Expenditures: TZS 12,762,260,000)
  • Development Expenditures: TZS 29,784,516,000

Allocation and Utilization:

• 2023/2024 Funds Received (by March 2024):
  • Regular Expenditures: 76.03% of approved budget (Salaries: 75.56%, Other Charges: 79.09%)
  • Development Projects: 38.09% of the allocated budget

Strategic Focus:

• Increased allocations reflect a strategic emphasis on industrial and commercial growth, aimed at enhancing infrastructure, supporting SMEs, and improving the business environment.

Challenges in Budget Execution:

• Underutilization of Development Funds: Only 38.09% of development funds were received, indicating challenges in project implementation, bureaucratic delays, or inefficiencies.
• Increased Funding Requests: Justifying and securing approval for a 20% budget increase in a competitive fiscal environment may be challenging.
• Allocation Discrepancies: Variances between allocated and received funds suggest potential issues in financial planning and execution, affecting operations and project timelines.
• Project Implementation and Oversight: Effective management and oversight of development projects are crucial to avoid delays, mismanagement, and corruption.
• Economic Impact and Sustainability: Ensuring that increased investments lead to sustainable economic benefits like job creation, productivity enhancement, and global competitiveness is essential. External economic shocks or misalignment with expected outcomes could pose additional challenges.

Key Insights for Economic Growth:

• The Ministry's efforts and increased budget aim to boost Tanzania's industrial and commercial sectors, critical for economic growth.
• Emphasis on improved infrastructure and business support is expected to enhance productivity, create jobs, and improve livelihoods.
• Strong justification and strategic planning are required to secure and effectively utilize the increased budget for 2024/2025.

Figures:

• 2023/2024 Budget (Approved):
  • Total: TZS 92,348,837,623
  • Ordinary Expenditures: TZS 66,698,567,623
  • Salaries: TZS 57,443,610,685
  • Other Charges: TZS 9,254,956,938
  • Development Expenditures: TZS 25,650,270,000
• 2024/2025 Budget (Requested):
  • Total: TZS 110,899,722,000
  • Ordinary Expenditures: TZS 81,115,206,000
  • Salaries: TZS 68,352,946,000
  • Other Expenditures: TZS 12,762,260,000
  • Development Expenditures: TZS 29,784,516,000