Tanzania: Mpango Decries Red Tape On Donor-Funded Projects


REGULATORY hurdles and limited funding are holding back implementation of development projects, notably construction of Central Railway system and the $30 billion Liquefied Natural Gas (LNG) plant.

As the government gears up to spend 11.8tri/-, equal to almost 40 per cent of the national budget, just 3.9tri/- or 34% of the budget had been by last February (this year), an indicator of ‘sluggish’ implementation of development projects across the country.

Presenting a fresh assessment on the implementation of the national budget and development plan for the financial year 2016/17 in the National Assembly, Finance and Planning Minister Dr Philip Mpango acknowledged the slow-down in implementation of development budget.

He explained the ‘slow-motion’ trend resulted from regulatory hurdles occasioned by “prolonged discussions” with the development partners; between July and February this year, the country had received 871.8bn/- out of the anticipated 3.1tri/- from foreign revenue sources.

“There was also an increase in interest for non-concessional loans at the international financial markets … this did not affect only Tanzania but all around Africa,” he said. The minister said the budget allocated was also released to repay an outstanding debt incurred in the course of implementation of these development projects.

In its budget priority last year, the government disclosed that implementation of the Mchuchuma and Liganga coal mining projects were still on the “negotiation stage” around strategic areas such as tax regimes and power pricing.

On the LNG project, implementing oil marketing firms were also still locked in negotiations around key issues to be included in the contracts with the donor community. Turkish contractor, Yapi Merkezi, and the Portuguese firm, Mota-engil Afrika, have since signed deals on implementation of the first phase of the 205km SGR from Dar es Salaam to Morogoro. “The project will kick off this year,” according to the minister.

However, he recalled that the government managed to procure two aircraft for the state flag-carrier, Air Tanzania, and that an advance payment of $56.89m had been made for the other aircraft, one expected to arrive mid this year.

Dr Mpango detailed that the national average economic growth stood at seven per cent, thanks to increased mining activities (at 16.5 per cent); transport (15.6 per cent); ICT (13.5 per cent and financial service at 11.3 per cent.

On revenue collection, the minister said the government managed to collect 15.37tri/- or 79 per cent of the targeted collections. This includes 9.3tri/- collected from tax sources or 95 per cent of the target, 1.3tri/- or 72 per cent from non tax sources and 3.5tri/- from domestic loan.

“Development partners donated 1.25trn/- or 40 per cent of our projected 3.11tri/- revenue,” Mr Mpango told lawmakers here yesterday.

Altogether, the government has released some 16.15 tri/- to the ministries, departments and government agencies – with a chunk amounting to 12.17tri/- to meet recurrent financing and just 3.97 tri/- used to finance development projects between July and February this year.

©Alleastafrica and Daily News