In February 2024, the Tanzania government's budget performance was evaluated based on actual operations compared to the budget estimates for the fiscal year. The government expenditure and revenue figures provide insight into the financial management of the country during this period.

Government Expenditure:

1. Wages and Salaries: Actual expenditure on wages and salaries in 2024 was TZS 870.2 billion, which was lower than the budget estimate of TZS 947.9 billion, indicating an 8% decrease.
2. Interest Costs: The government spent TZS 264.6 billion on interest costs, which was less than both the budget estimate of TZS 290.4 billion and the actual expenditure in 2023. This represents a 9% decrease from the estimated amount.
3. Development Expenditure: Actual development expenditure in 2024 amounted to TZS 914.6 billion, compared to the budget estimate of TZS 1,087.2 billion. This indicates a 16% decrease from the estimated amount.
4. Other Recurrent Expenditure: Other recurrent expenditure exceeded the budget estimate by reaching TZS 1,154.4 billion, significantly higher than both the actual expenditure in 2023 and the budget estimate for 2024. This represents a 37% increase from the estimated amount and 4% over the actual operations.

Government Revenues:

1. Taxes on Imports: The government collected TZS 711.2 billion from taxes on imports, which was slightly lower than the budget estimate of TZS 742 billion, resulting in a 4% decrease.
2. Income Tax: Income tax revenues exceeded the budget estimate by reaching TZS 558.3 billion, compared to the estimated amount of TZS 546 billion, showing a 2% increase.
3. Tax on Local Goods and Services: Actual revenue from tax on local goods and services was TZS 433 billion, lower than the budget estimate of TZS 494.7 billion, indicating a 12% decrease.
4. Other Tax: Revenue from other taxes was TZS 115.4 billion, slightly below the budget estimate of TZS 126.2 billion, resulting in a 9% decrease.
5. Non-Tax Revenues: Non-tax revenues amounted to TZS 305.9 billion, falling short of the budget estimate by 18% and indicating a significant decrease from the actual operations in 2023.

Deficit: The deficit for the fiscal year was TZS 45% higher than the estimated amount, indicating a significant gap between government spending and revenue generation. This deficit is a concern as it suggests potential financial strain on the government's budgetary management.

Tanzania government's budget performance and its influence on economic growth:

1. Decrease in Development Expenditure: The 16% decrease in actual development expenditure compared to the budget estimate suggests a potential slowdown in investment in infrastructure, education, and other sectors crucial for long-term economic growth. Limited investment in development projects may hinder Tanzania's ability to improve productivity and competitiveness, thus impacting economic growth prospects.
2. Exceeding Other Recurrent Expenditure: The significant increase (37%) in other recurrent expenditure, which includes items like administrative costs and maintenance, indicates potential inefficiencies in spending. While some increase may be justified for essential services, an excessively high growth rate in recurrent expenditure could divert funds away from more productive investments, possibly hindering economic growth.
3. Revenue Shortfalls: The shortfall in tax revenues, particularly from non-tax sources (-41%), suggests challenges in revenue collection. Lower-than-expected revenues could constrain the government's ability to finance development projects and provide essential services, thereby limiting economic growth opportunities.
4. Deficit Increase: The fact that the deficit is 45% higher than estimated indicates that the government is spending more than it is earning, which can have negative implications for economic stability. A large deficit could lead to increased borrowing or reliance on monetary financing, potentially leading to inflationary pressures and reduced investor confidence, both of which can hamper economic growth.

The budget performance suggests potential challenges in fiscal management that could impact Tanzania's economic growth. To foster sustainable growth, the government may need to address issues such as inefficient spending, revenue collection, and deficit management while prioritizing investment in key sectors that drive long-term economic development.