2024/25 BUDGET: A PATHWAY TO ECONOMIC GROWTH AND IMPROVED INCOMES FOR ORDINARY TANZANIANS

The 2024/25 Budget, with a total allocation of TZS 49.35 trillion, aims to foster economic growth and improve incomes for ordinary Tanzanians. Projected GDP growth is set to rise from 5.1% in 2023 to 5.4% in 2024, driven by increased investments in agriculture (26.5% of GDP), construction (13.2%), and mining (9.0%). Key measures include a 10% increase in tax revenue to TZS 29.41 trillion, a 30% allocation for development expenditure on energy and transportation, and targeted support for local industries and agriculture. However, managing a national debt of TZS 91.7 trillion and inflation will be crucial to ensure sustainable benefits for citizens.

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.

Revenue Self-Sufficiency for Local Governments

Local Government Authorities (LGAs) in Tanzania need to collect to become self-sufficient in executing their projects without relying on funds from the central government, we need to consider the following factors:

1. Current Revenue and Shortfalls:
   • For the fiscal year 2023/2024, LGAs were projected to collect TZS 1.14 trillion, but as of March 2024, they had collected TZS 848.14 billion.
   • For the fiscal year 2024/2025, the projected revenue is TZS 1.60 trillion.
2. Dependence on Central Government:
   • LGAs currently receive substantial funding from the central government for both recurrent and development expenditures. This support is crucial for covering the gap between locally collected revenues and the total budget required for their activities.
3. Total Budget Requirements:
   • To estimate the total budget requirements for LGAs, we should consider both their recurrent and development needs.

Assuming that the total budget required by LGAs for the fiscal year 2024/2025 can be inferred from the overall budget allocated to TAMISEMI and its sub-entities, we have:

• Total Budget for TAMISEMI and its sub-entities for 2024/2025: TZS 10.125 trillion
  • This includes salaries, other recurrent expenditures, and development projects.

Estimation for Self-Sufficiency

Calculation Approach:

1. Estimate the portion of the total budget that pertains to LGAs specifically.
   • Since TAMISEMI oversees not only LGAs but also other institutions and regions, we need to apportion the total budget accordingly. For simplicity, we can assume that a significant portion of the TAMISEMI budget is directed towards LGAs.
2. Current Revenue vs. Required Budget:
   • If LGAs need to match the projected budget and avoid central government dependency, they should aim to collect an amount closer to the total TAMISEMI budget or at least a significant portion of it.
3. Projected Self-Sufficiency Target:
   • If we assume LGAs need to be responsible for around 60-70% of the total TAMISEMI budget to cover their essential functions and projects independently, this can provide a rough estimate.

Calculation:

• Total TAMISEMI Budget for 2024/2025: TZS 10.125 trillion
• Assumed LGA Proportion (60-70%):
  • 60% of TZS 10.125 trillion = TZS 6.075 trillion
  • 70% of TZS 10.125 trillion = TZS 7.0875 trillion

Therefore, to achieve self-sufficiency, LGAs would need to aim for revenue collection in the range of approximately TZS 6.075 trillion to TZS 7.0875 trillion.

Hence, to be self-sufficient and execute their projects without relying on funds from the central government, LGAs in Tanzania would need to significantly increase their revenue collection to the range of TZS 6.075 trillion to TZS 7.0875 trillion annually. This represents a substantial increase from the current revenue collection figures and would require enhanced revenue generation strategies, improved efficiency, and effective local economic development initiatives.

Implementation Strategy:

• Enhanced Revenue Generation: LGAs should explore and implement strategies to boost local revenue collection. This could involve improving tax compliance, exploring new revenue sources, and optimizing revenue collection mechanisms.
• Efficiency Improvements: Streamlining operations and reducing inefficiencies can help stretch existing budgets further.
• Local Economic Development: Encouraging economic growth within local jurisdictions can increase the tax base and overall revenue potential.

TAMISEMI Budget Implementation and Planning: 2023/2024 Review and 2024/2025 Projections

Revenue and Expenditure

Revenue:

• The budget allocated for TAMISEMI for the fiscal year 2023/24 was TZS 9.18 trillion.
• As of March 2024, the total revenue collected was TZS 6.99 trillion, which is 76.18% of the approved budget.

Expenditure:          

• Of the collected revenue, TZS 4.47 trillion was used for recurrent expenditures, including TZS 3.66 trillion for salaries and TZS 810.77 billion for other expenses.
• Development projects received TZS 2.52 trillion, comprising TZS 2.06 trillion from domestic sources and TZS 456.39 billion from external sources.
• Additionally, TZS 848.14 billion was generated from local government revenue, with TZS 501.98 billion spent on other expenditures and TZS 226.05 billion on development projects​​.

Successes and Challenges in Budget Implementation for 2023/2024

Successes:

1. Local Government Elections Preparation:
   • TZS 12.00 billion was allocated for local government election preparations, of which TZS 5.6 billion was received by March 2024.
   • Activities included verifying administrative areas, drafting regulations, and conducting stakeholder meetings​​.
2. Education Sector:
   • TZS 1.72 trillion was allocated for primary and secondary education through grants from the central government and development partners.
   • TZS 1.26 trillion was received by March 2024, facilitating various educational activities.
   • The primary education program registered 19,863 students, and significant achievements were noted in national exams with improved pass rates​​.

Challenges:

• Delays in fund disbursement affected the timely execution of some planned activities, especially those involving procurement processes.

Budget Plan for 2024/2025

Revenue and Expenditure

Revenue Projections:

• The Office of the President - TAMISEMI, along with its subordinate institutions, 26 regions, and 184 councils, plans to collect a total of TZS 1.601 trillion from domestic sources in the 2024/25 fiscal year.
• Breakdown of the revenue projections:
  • Office of the President - TAMISEMI: TZS 188.96 billion
  • Institutions: TZS 55.43 billion
  • Regions: TZS 315.94 million
  • Councils: TZS 1.356 trillion​​.

Expenditure Allocations:

• The total budget request for the 2024/25 fiscal year is TZS 10.125 trillion.
  • Of this amount, TZS 6.71 trillion is allocated for recurrent expenditures, including TZS 5.52 trillion for salaries and TZS 1.18 trillion for other expenses.
  • The development budget is TZS 3.41 trillion, with TZS 2.26 trillion from domestic sources and TZS 1.15 trillion from external sources​​.

Key Priorities for 2024/25

1. Enhancing Local Government Administration:
   • Significant investments in administrative infrastructure and housing for leaders to improve governance and service delivery.
2. Improving Primary and Secondary Education:
   • Allocation of funds to ensure better educational facilities and resources, aiming to enhance the quality of education and student performance.
3. Investing in Health Services:
   • Funds allocated for primary healthcare, social welfare, and nutrition programs to improve public health outcomes.
4. Infrastructure Development:
   • Investments in road construction and maintenance, information systems management, and economic empowerment of citizens to foster sustainable development​​.

These allocations and priorities reflect a comprehensive approach to addressing the needs of various sectors under TAMISEMI's jurisdiction, aiming to enhance overall service delivery and development outcomes in the regions and councils.

Local Government Authority Revenue

Revenue for the Fiscal Year 2023/2024

• Approved Revenue: TZS 1.14 trillion
• Actual Revenue (up to March 2024): TZS 848.14 billion

The revenue for Local Government Authorities increased from TZS 625.32 billion in March 2023 to TZS 848.14 billion in March 2024, indicating an increase of TZS 222.82 billion​​.

Revenue Projections for the Fiscal Year 2024/2025

• Projected Revenue: TZS 1.60 trillion

For the fiscal year 2024/25, Local Government Authorities aim to collect a total of TZS 1.60 trillion, which is an increase of TZS 456.89 billion or 39.93% compared to the approved revenue of TZS 1.14 trillion for the fiscal year 2023/24​​.

Challenges in Budget Implementation for 2024/2025

Based on the budget implementation of the fiscal year 2023/2024, several challenges could impact the budget execution for 2024/2025, focusing on Tanzania's economic growth:

1. Delays in Fund Disbursement:
   • Delays in the release of funds have historically affected the timely implementation of planned activities. This could continue to hinder progress, particularly for development projects that rely on timely funding.
2. Revenue Collection Shortfalls:
   • Despite efforts to improve revenue collection, actual revenues have often fallen short of projections. For 2023/2024, the revenue collected by Local Government Authorities was TZS 848.14 billion out of an approved TZS 1.14 trillion, showing a significant shortfall. Achieving the ambitious revenue target of TZS 1.60 trillion for 2024/2025 could be challenging.
3. Economic Growth and External Shocks:
   • Tanzania's economic growth could be impacted by external factors such as global economic conditions, commodity price fluctuations, and international trade dynamics. These factors can influence domestic revenue generation and economic stability.
4. Inflation and Exchange Rate Volatility:
   • Inflationary pressures and exchange rate volatility can affect the cost of goods and services, impacting both recurrent and development expenditures. This can lead to increased costs for government projects and services.
5. Capacity and Efficiency in Public Administration:
   • Enhancing local government administration requires significant investments in infrastructure and capacity building. Inefficiencies in public administration and management could impede the effective use of allocated funds and the execution of planned activities.
6. Infrastructure and Service Delivery:
   • Infrastructure development, especially in transportation and communication, remains a critical challenge. Inadequate infrastructure can limit economic growth and the delivery of essential services, affecting sectors such as education, health, and economic empowerment initiatives.
7. Corruption and Governance Issues:
   • Corruption and poor governance practices can undermine budget implementation by diverting funds away from intended projects and services. Strengthening transparency and accountability mechanisms is essential to mitigate these risks.
8. Climate Change and Environmental Factors:
   • Climate change poses a significant risk to Tanzania's economic growth, particularly in sectors such as agriculture, which is highly sensitive to weather patterns. Environmental degradation and natural disasters can disrupt economic activities and infrastructure.

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

Challenges of Dependence on Mineral Revenues in Tanzania's Economic Growth for the Year 2024/2025

The heavy reliance on mineral revenues poses significant risks to Tanzania's economic stability and growth due to market volatility and global uncertainties. Ensuring diversified and stable revenue sources, managing high expenditure needs, and addressing regulatory and geopolitical challenges will be crucial for the successful implementation of the Ministry of Minerals' budget for 2024/2025.

Revenue and Expenditure Overview for 2023/2024

1. Approved and Revised Budget:
   • Approved Budget: TZS 89,357,491,000.00
   • Revised Budget: TZS 163,008,241,000.00
   • Other Expenditures: TZS 45,877,443,000.00
   • Salaries: TZS 20,307,498,000.00
   • Development Projects: TZS 96,823,300,000.00
2. Revenue Collection Target:
   • Total Target: TZS 1,006,705,169,300.00
   • To Treasury: TZS 882,128,205,000.00
   • Ministry's Institutions: TZS 124,576,964,300.00

Achievements in Mineral Revenues

• Mineral Sector Tax Revenues:
  • 2022/2023: TZS 3,143,212,216,996.76 (13.9% of total tax revenues by TRA)
  • Year-on-Year Increase: 50.3% from TZS 2,091,256,445,986.27 in 2021/2022

Key Challenges

1. Dependence on Mineral Revenues

• Volatility: Mineral revenues are highly susceptible to global price fluctuations. The 2023/2024 mineral tax revenue was significant but subject to change due to market instability.
  • Example: Diamond prices dropped by 19% between July 2023 and March 2024, influenced by geopolitical events like the Russia-Ukraine war.

2. Global Market Uncertainties

• Economic Downturns: Global economic instability can significantly affect mineral prices and demand, impacting Tanzania's revenue projections.
• Geopolitical Conflicts: Such conflicts can create market uncertainties, leading to unpredictable revenue streams.

3. High Expenditure Needs

• Budget Allocation:
  • Total Revised Budget for 2023/2024: TZS 163,008,241,000.00
  • Development Projects: TZS 96,823,300,000.00
  • Salaries: TZS 20,307,498,000.00

4. Infrastructure and Capacity Building

• Investment Requirements: Enhancing geological surveys, supporting small-scale miners, and building institutional capacity require significant investment in equipment and training.

5. Regulatory and Management Issues

• Implementation Challenges: Effective administration of new regulations (e.g., CSR guidelines) requires coordination among stakeholders, which can be complex and resource-intensive.

6. Geopolitical and Environmental Factors

• Impact on Stability: Unforeseen geopolitical and environmental events can disrupt economic stability, affecting revenue projections and expenditure needs.

Figures and Estimates

• Revenue Collection Target for 2023/2024:
  • Total: TZS 1,006,705,169,300.00
  • To Treasury: TZS 882,128,205,000.00
  • Ministry's Institutions: TZS 124,576,964,300.00
• Mineral Sector Tax Revenue for 2023/2024: TZS 3,143,212,216,996.76 (13.9% of TRA's total tax revenue)

Challenges in Implementing Tanzania's 2024/2025 Budget Due to Anticipated Revenue Collection Shortfalls

Tanzania's 2024/2025 budget faces significant challenges due to anticipated revenue collection shortfalls. In 2023/2024, the Ministry of Finance aimed to collect TZS 39.79 trillion but only managed TZS 32.49 trillion (82% of the target). For 2024/2025, the revenue projection is TZS 44.19 trillion, with TZS 29.42 trillion expected from the Tanzania Revenue Authority (TRA). However, given the previous year’s shortfall, meeting these targets may be difficult. The total proposed expenditure is TZS 18.17 trillion, with TZS 13.13 trillion allocated for debt servicing. High debt servicing costs and substantial expenditure requirements further complicate budget implementation.

Revenue Collection Trends:

• In 2023/2024, the Ministry of Finance projected a total revenue collection of TZS 39.79 trillion but only managed to collect TZS 32.49 trillion by April 2024, achieving 82% of the annual target.
• The Tanzania Revenue Authority (TRA) collected TZS 21.31 trillion against a target of TZS 26.73 trillion, and the External Finance Department collected TZS 4.92 trillion against a target of TZS 5.47 trillion.

Projected Revenue for 2024/2025:

• For 2024/2025, the Ministry of Finance expects to collect TZS 44.19 trillion.
• This includes TZS 29.42 trillion from the TRA, TZS 5.13 trillion from grants and concessional loans, TZS 9.60 trillion from commercial loans, and TZS 45.01 billion from non-tax revenue.
• Given the 2023/2024 collection shortfall, achieving these targets may be challenging.

Debt Servicing:

• Debt servicing for 2024/2025 is projected at TZS 13.13 trillion.
• In 2023/2024, TZS 8.48 trillion was spent on debt servicing out of an allocated TZS 10.48 trillion.
• The high cost of debt servicing significantly reduces the funds available for other expenditures.

Expenditure Requirements:

• The total proposed expenditure for 2024/2025 is TZS 18.17 trillion, with TZS 17.63 trillion allocated for recurrent expenditure, including TZS 13.13 trillion for debt servicing and TZS 946.45 billion for salaries.
• Development expenditure is projected at TZS 544.05 billion, which is a modest decrease from TZS 556.38 billion in 2023/2024.

Comparison with Previous Year’s Performance:

• If the revenue collection efficiency of 82% from 2023/2024 continues, the Ministry would only collect approximately TZS 36.24 trillion out of the projected TZS 44.19 trillion for 2024/2025.
• This shortfall would exacerbate the challenges in meeting the proposed expenditure of TZS 18.17 trillion.

Economic Growth and External Factors:

• Economic growth rates influence revenue collection. Any slowdown in Tanzania's economic growth could hinder the ability to meet revenue targets.
• External factors like global commodity prices, inflation, and foreign exchange rates can further impact revenue collection and expenditure.

Institutional Capacity:

• Efficient budget implementation requires strong institutional capacity. Any weaknesses here can lead to inefficiencies and mismanagement of allocated funds.

Implementation Review of the Ministry's Plan and Budget for 2023/24

Expenditure Trends up to April 2024

Total Approved Budget: TZS 15.87 trillion for both recurrent and development expenditures.

• Recurrent Expenditures: TZS 15.31 trillion, including:
• Other Recurrent Expenditures: TZS 13.62 trillion (including TZS 10.48 trillion for government debt servicing and TZS 1.69 trillion for salaries).
• Development Expenditures: TZS 556.38 billion (comprising TZS 482.55 billion from domestic sources and TZS 73.82 billion from external sources)​​.

Revenue for the Ministry for 2024/25

For the fiscal year 2024/25, the Ministry of Finance has detailed its expected revenue collection and sources:

Total Estimated Revenue: TZS 44.19 trillion

• Tanzania Revenue Authority (TRA): Expected to collect TZS 29.42 trillion.
• Grants and Concessional Loans: Expected to bring in TZS 5.13 trillion.
• Commercial Loans from Domestic and External Sources: Estimated at TZS 9.60 trillion.
• Non-Tax Revenue: Expected to be TZS 45.01 billion.
• Revenue from the Office of the National Audit Office: Estimated to collect TZS 850 million from office rental income across various regions in the country​​.

Budget Estimates for 2024/2025

• Total Proposed Expenditure: TZS 18.17 trillion
  • Recurrent Expenditure: TZS 17.63 trillion
  • Debt Servicing: TZS 13.13 trillion
  • Salaries: TZS 946.45 billion
  • Other Recurrent Expenditures: TZS 937.30 billion
  • Main Fund Services: TZS 2.61 trillion
  • Development Expenditure: TZS 544.05 billion​​.

Implementation of Ministry Priorities

Collection and Search for Total Revenue of TZS 39.79 Trillion

Expected Revenue Collection for 2023/24:

• The Ministry of Finance was estimated to collect a total of TZS 39.79 trillion out of the government's overall revenue collection target of TZS 44.39 trillion for the fiscal year 2023/24.
  • Breakdown of Revenue Collection Targets:
  • Vote 21: Expected to collect TZS 39.74 trillion
    • Tanzania Revenue Authority (TRA): TZS 26.73 trillion
    • External Finance Department: TZS 5.47 trillion
    • Government Debt Management Department: TZS 7.54 trillion
  • Vote 23: Expected to collect TZS 60 billion
  • Vote 50: Expected to collect TZS 300 million

Actual Revenue Collection up to April 2024:

• By April 2024, the ministry successfully collected a total of TZS 32.49 trillion, achieving 82% of the annual target.
  • Breakdown of Actual Collections:
    • Tanzania Revenue Authority (TRA): TZS 21.31 trillion
    • External Finance Department: TZS 4.92 trillion
    • Government Debt Management Department: TZS 6.18 trillion
    • Revenue through Vote 23: TZS 79.23 billion
    • Revenue through Vote 50: TZS 950 million​​.

Expenditure for 2024/25

The Ministry of Finance has requested an approval for total expenditures of TZS 18.17 trillion for the fiscal year 2024/25, which includes both recurrent and development expenditures for eight budgetary votes (mafungu).

1. Recurrent Expenditures:
   • Total: TZS 17.63 trillion.
   • Government Debt Servicing: TZS 13.13 trillion.
   • Salaries: TZS 946.45 billion.
   • Other Expenses: TZS 937.30 billion (for ministry and its institutions).
   • Main Fund Services: TZS 2.61 trillion.
2. Development Expenditures:
   • Total: TZS 544.05 billion.

National Audit Office (Fungu 045)

• Total Requested: TZS 112.73 billion.
  • Recurrent Expenditures: TZS 101.26 billion.
  • Development Expenditures: TZS 11.47 billion.

Challenges in Budget Implementation for 2024/2025 Considering Tanzania's Economic Growth

Budget Implementation in 2023/2024

In the fiscal year 2023/2024, the Ministry of Finance of Tanzania faced several challenges in implementing its budget. Key figures from this period include:

• Total Revenue Collected: TZS 32.49 trillion
  • Tanzania Revenue Authority: TZS 21.31 trillion
  • External Finance Department: TZS 4.92 trillion
  • Government Debt Management Department: TZS 6.18 trillion
  • Various Other Revenues (Votes 23 and 50): TZS 79.23 billion and TZS 950 million respectively​​.

Projected Challenges for 2024/2025

Given the economic context and the performance in 2023/2024, several challenges may impact the implementation of the budget for 2024/2025:

1. Revenue Collection Shortfalls:
   • In 2023/2024, the ministry achieved 82% of its annual revenue target. If similar trends continue, it may face difficulties in meeting revenue projections for 2024/2025.
2. Economic Growth Rate:
   • Economic growth influences revenue collection. Any slowdown in Tanzania’s economic growth could impact the ability to meet revenue targets. The projected economic growth needs to be robust to support revenue targets.
3. Debt Servicing:
   • The Ministry spent TZS 8.48 trillion on servicing government debt, out of the allocated TZS 10.48 trillion. This high expenditure on debt servicing limits the funds available for development and other essential services​​.
4. Expenditure Management:
   • Managing the allocated budget effectively across different sectors remains a challenge. In 2024/2025, the Ministry has proposed a total expenditure of TZS 18.17 trillion, with TZS 17.63 trillion for recurrent expenditure, including TZS 13.13 trillion for debt servicing and TZS 946.45 billion for salaries. Ensuring these funds are utilized effectively is crucial​​.
5. External Factors:
   • External economic factors such as global commodity prices, inflation, and foreign exchange rates can impact both revenue collection and expenditure.
6. Institutional Capacity:
   • The ability of various government departments to implement and manage the budget efficiently is essential. Any weaknesses in institutional capacity can result in budget implementation challenges.

Ministry of Minerals' 2024/2025 Budget Amid Economic Growth Uncertainties

The Ministry of Minerals faces significant challenges in implementing the 2024/2025 budget due to economic growth uncertainties. In 2023/2024, mineral sector tax revenues reached TZS 3.14 trillion, a 50.3% increase from the previous year, contributing 13.9% of total tax revenues. The revised budget for 2023/2024 was TZS 163 billion, with TZS 96.8 billion allocated for development projects and TZS 20.3 billion for salaries. However, dependence on volatile mineral revenues and global market instabilities, like the 19% drop in diamond prices, pose risks. Ensuring stable revenue sources and managing high expenditure demands will be crucial for the successful implementation of the 2024/2025 budget.

1. Revenue and Expenditure for the Year 2023/2024

• Approved Budget: TZS 89,357,491,000.00
• Revised Budget: TZS 163,008,241,000.00
  • Other Expenditures: TZS 45,877,443,000.00
  • Salaries: TZS 20,307,498,000.00
  • Development Projects: TZS 96,823,300,000.00
• Revenue Collection Target: TZS 1,006,705,169,300.00
  • To be Submitted to Treasury: TZS 882,128,205,000.00
  • To be Used by Ministry's Institutions: TZS 124,576,964,300.00​​.

2. Implementation of Ministry Projects for 2023/2024

• Major Projects:
  • Construction of a large and modern Multi Metals Processing Facility at Buzwagi Special Economic Zone​​.
  • Continued issuance of export permits, increasing from 10,318 in 2022 to 11,258 in 2023 due to higher demand for gemstones and coal​​.
  • Revenue from mineral sector taxes increased to TZS 3,143,212,216,996.76, which is 13.9% of total taxes collected by TRA, showing a 50.3% increase from the previous year​​.

3. Achievements and Challenges for 2023/2024

• Achievements:
  • Significant increase in mineral sector tax revenues.
  • Expansion and increased regulation of the mining sector.
  • Successful issuance and management of mining permits​​.

4. Plan and Budget Estimates (Revenue and Expenditure) for 2024/2025

• Guidelines Considered:
  • National Guidelines for Budget Preparation 2024/2025
  • CCM Election Manifesto 2020
  • Five-Year National Development Plan 2021/2022 – 2025/2026
  • Mineral Policy of 2009
  • National Development Vision 2025​​.
• Planned Expenditures:
  • Enhance revenue collection and increase the contribution of the mineral sector to the national GDP.
  • Develop strategic minerals and promote investment.
  • Continue geological research and support small-scale miners​​.

5. Work Plan for 2024/2025

• Key Implementation Areas:
  • Strengthen revenue collection and sector contribution.
  • Develop key and strategic minerals.
  • Promote investment and value addition in minerals.
  • Conduct extensive geophysical surveys and support small-scale miners.
  • Build capacity in institutions under the Ministry of Minerals​​.

Significant Increase in Mineral Sector Tax Revenues

• Total Revenue for 2022/2023: TZS 3,143,212,216,996.76
  • This accounted for 13.9% of the total tax revenues collected by the Tanzania Revenue Authority (TRA).
• Revenue Increase: 50.3% from the previous year.
  • Previous Year's Revenue (2021/2022): TZS 2,091,256,445,986.27

Challenges in Implementing the 2024/2025 Budget Considering Tanzania's Economic Growth

Focusing on the review of the 2023/2024 budget implementation and the 2024/2025 budget estimates, several challenges might affect the successful implementation of the 2024/2025 budget:

Economic Growth and Revenue Collection

1. Dependence on Mineral Revenues:
   • The 2023/2024 budget reported significant tax revenues from the mineral sector, totaling TZS 3,143,212,216,996.76, which was a 50.3% increase from the previous year. However, the reliance on mineral revenues can be volatile due to fluctuating global prices and demand​​.
2. Global Market Uncertainties:
   • The global market for minerals, such as diamonds, has shown instability. For instance, from July 2023 to March 2024, diamond prices fell by 19% due to economic downturns triggered by geopolitical conflicts like the Russia-Ukraine war​​.

Budget Allocation and Expenditure

1. High Expenditure Needs:
   • The planned expenditures for development projects, salaries, and other operational costs remain high. For 2023/2024, the total revised budget was TZS 163,008,241,000.00, with significant allocations for development projects (TZS 96,823,300,000.00) and salaries (TZS 20,307,498,000.00)​​.
2. Infrastructure and Capacity Building:
   • There are extensive plans for capacity building within the Ministry and its institutions, including enhancing geological surveys and supporting small-scale miners. However, these initiatives require substantial investment in equipment and training, which can strain the budget​​.

Implementation and Administrative Challenges

1. Regulatory and Management Issues:
   • The implementation of new regulations, such as the CSR (Corporate Social Responsibility) guidelines, has shown to be challenging. Ensuring compliance and effective administration of these guidelines requires coordination among various stakeholders, which can be complex​​.
2. Geopolitical and Environmental Factors:
   • Unforeseen geopolitical events and environmental factors can impact economic stability and growth, affecting revenue projections and expenditure needs.

Figures and Estimates

• Revenue Collection Target for 2023/2024: TZS 1,006,705,169,300.00
  • Submission to Treasury: TZS 882,128,205,000.00
  • Usage by Ministry's Institutions: TZS 124,576,964,300.00​​.
• Revenue from Mineral Sector Taxes for 2023/2024: TZS 3,143,212,216,996.76, accounting for 13.9% of TRA's total tax revenue​​.

Significant Budget Increase and Strategic Focus on Industrial and Commercial Growth in Tanzania for 2024/2025

Revenue and Expenditure for the Year 2023/2024

Approved Funds:

• The Ministry of Industry and Trade was allocated a total of TZS 92,348,837,623.
  • TZS 66,698,567,623 for regular expenditures, which includes:
  • TZS 9,254,956,938 for Other Charges (OC).
  • TZS 57,443,610,685 for salaries.
  • TZS 25,650,270,000 for development projects​​.

Received Funds:

• By March 2024, the Ministry received:
  • TZS 50,376,084,589.17 for regular expenditures (76.03% of the approved budget).
  • TZS 7,069,975,635.15 for Other Charges (79.09% of allocated OC).
  • TZS 43,306,108,954.02 for salaries (75.56% of allocated salary budget).
  • TZS 9,770,269,727.63 for development projects (38.09% of the allocated development budget)​​.

Financial Requests for 2024/2025

Overview

For the fiscal year 2024/2025, the Ministry of Industry and Trade is requesting approval from the Parliament for a total of TZS 110,899,722,000.

Breakdown of Requested Funds

• Total Requested Funds: TZS 110,899,722,000
  • Ordinary Expenditures (Matumizi ya Kawaida): TZS 81,115,206,000
  • Salaries: TZS 68,352,946,000
  • Other Expenditures: TZS 12,762,260,000
  • Development Expenditures (Matumizi ya Maendeleo): TZS 29,784,516,000

These funds are intended to support both the regular operations of the Ministry and its development projects aimed at boosting industrial and commercial growth in Tanzania. The ordinary expenditures cover the salaries and other necessary operational costs, while the development expenditures focus on strategic projects and initiatives to enhance the industrial and commercial sectors.

The 2023/2024 and 2024/2025 budgets for the Ministry of Industry and Trade reveals a strategic emphasis on expanding and improving the industrial and commercial sectors.

The increased allocations for both ordinary and development expenditures reflect the Ministry's commitment to fostering economic growth through better infrastructure, enhanced business environments, and stronger support for SMEs. These efforts are crucial for boosting the contributions of these sectors to Tanzania's economy, ultimately leading to sustainable development and improved livelihoods for the Tanzanian population.

Budget for 2023/2024

• Total Approved Funds: TZS 92,348,837,623
  • Ordinary Expenditures: TZS 66,698,567,623
  • Other Charges (OC): TZS 9,254,956,938
  • Salaries: TZS 57,443,610,685
  • Development Expenditures: TZS 25,650,270,000

Budget for 2024/2025

• Total Requested Funds: 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

Key Insights Focus on Economic Growth

1. Increase in Total Budget:
   • The total budget requested for 2024/2025 shows a significant increase of TZS 18,550,884,377 from the previous year.
   • This increase reflects the Ministry's commitment to expanding its operations and development projects, indicating a more aggressive push towards industrial and commercial growth.
2. Ordinary Expenditures:
   • There is an increase in ordinary expenditures from TZS 66,698,567,623 in 2023/2024 to TZS 81,115,206,000 in 2024/2025.
   • This increase, especially in salaries and other expenditures, suggests a focus on strengthening the operational capacity of the Ministry, ensuring better service delivery, and improving employee welfare.
3. Development Expenditures:
   • Development expenditures have increased from TZS 25,650,270,000 in 2023/2024 to TZS 29,784,516,000 in 2024/2025.
   • The increase in funds allocated for development indicates a strong emphasis on infrastructure projects and strategic investments aimed at boosting the industrial sector.
4. Contribution to Economic Growth:
   • The increased budget allocations highlight the importance of the industrial and commercial sectors in driving Tanzania's economic growth.
   • Enhanced infrastructure, support for small and medium-sized enterprises (SMEs), and improvements in the business environment are key focus areas that will contribute to higher productivity, job creation, and overall economic development.
   • The Ministry's efforts to attract new investments and support existing businesses are expected to enhance Tanzania's competitiveness on a global scale.

While the budget for 2024/2025 signals a proactive approach towards advancing industrial and commercial sectors in Tanzania, challenges related to budget execution, allocation management, project oversight, and economic impact assessment will need close attention to ensure effective implementation and optimal use of resources:

1. Budget Execution Challenges: The Ministry of Industry and Trade received 76.03% of its approved budget for regular expenditures in 2023/2024 by March 2024. While this indicates a significant portion was disbursed, it also suggests potential challenges in fully utilizing allocated funds, particularly for development projects which received only 38.09% of the allocated budget by that time. This underutilization could stem from bureaucratic processes, delays in project implementation, or inefficiencies in financial management.
2. Increased Funding Requests: The request for TZS 110,899,722,000 in 2024/2025 represents a substantial increase compared to the approved budget of TZS 92,348,837,623 in 2023/2024. Securing parliamentary approval for this increased budget amidst fiscal constraints or competing priorities could pose challenges. It will require strong justification and strategic planning to convince stakeholders of the necessity and effectiveness of the additional funds.
3. Allocation Discrepancies: Despite increased allocations, discrepancies between allocated and received funds for specific expenditures (e.g., salaries, development projects) indicate potential discrepancies in financial planning or execution. These gaps may lead to operational challenges, such as delayed payments affecting employee morale or project delays impacting economic outcomes.
4. Project Implementation and Oversight: The focus on development expenditures highlights a strategic push for industrial and commercial growth. However, effectively managing and monitoring these development projects is critical. Challenges may arise in ensuring projects are completed on time, within budget, and with the intended impact. This requires robust project management capabilities and effective oversight mechanisms to prevent mismanagement or corruption risks.
5. Economic Impact and Sustainability: While increased budget allocations are intended to bolster economic growth through improved infrastructure and business support, the actual economic impact needs careful assessment. Ensuring these investments translate into sustainable economic benefits, such as increased productivity, job creation, and enhanced competitiveness, will be crucial. Challenges may emerge if outcomes do not align with expectations or if there are external economic shocks impacting the sectors.