Tanzania debt tops 69.44 trillion shillings

DODOMA Tanzania

Tanzania’s Minister for Finance and Planning, Mwigulu Nchemba told the Parliament that the East African nation’s public debt climbed by almost 14.4% last year as the country ramped up borrowing to fund its infrastructure projects.

Tabling the 2022/23 government budget, the minister said that as by April this year, the public debt reached 69.44 trillion shillings compared to 60.72 trillion in April 2021.

“In that total the internal debt has reached 22.37 trillion (32.2%) and external debt reached 47.07 trillion (67.8%).” He said adding that bigger part of the external debt sourced from loans.

He said that according to a debt endurability evaluation conducted in 2021, the ratio of government debt value in relation to gross domestic product (GDP) is 31.0% compared to the debt ceiling which is 55%.

“With that note, the current ratio of external debt value in relation to export sales stands at 142.4% compared to the ceiling of 180%.” He said.

In improvement of agricultural sector, Mwigulu said that the government has increased the allocated fund from 294 billion shillings to 954 billion shillings with aim of stimulating agricultural growth of 10% by 2030.

Transport and telecommunication activities accounted for the biggest share of external debt, according to the budget. Social welfare and education, energy and mining followed.

The minister revealed that in the financial year 2022/23, the government is expected to collect and spend a total of 41.48 trillion shillings; 28.02 trillion being internal revenue and spend 11.31 trillion shillings to service loans.

Tanzania has increased public investment in rail links, roads, ports and power plants as it looks to develop a regional trade and manufacturing hub.

Due to improved performance in tourism, the reopening of trade corridors, and accelerated rollout of COVID-19 vaccines. Inflation is projected to increase to 4.4% in 2022 and to 3.8% in 2023 due to higher energy prices because of the Russia–Ukraine conflict.

The nation’s earnings from gold exports, its biggest source of foreign currency, fell 7.2% to $2.7 billion last year. Other foreign earnings, however, climbed; exports of manufactured goods such as sisal and sisal products jumped 33.5% to $1.2 billion, while travel receipts almost doubled to $1.4 billion as international tourist arrivals rebounded. - Africa