Finance and Planning Minister Dr. Mwigulu Nchemba stated that a total of Sh10.48 trillion will be used to service the nation's debt as he asked the Parliament to approve a budget of Sh15.94 trillion for his ministry for the fiscal year 2023–2024.
The Treasury has received Sh2.854 trillion in overall funding, while "other services" have received another Sh2.315 trillion in funding.
The budget committee of the parliament expressed satisfaction with the government's debt-paying schedule. Omari Mohamed Kigua, deputy chairman of the committee, stated, “We, however, advise the government to ensure that all the loans it acquires are spent on development projects.”
He said that the economy of Tanzania benefits more when borrowed money is used for development initiatives.
The Controller and Auditor General (CAG), also known as the National Audit Office of Tanzania, will spend Sh97.134 billion to carry out its tasks in the next fiscal year.
Dr. Nchemba, who also serves as the governing party's candidate for the Iramba West seat in parliament, declared that one of his ministry's top tasks for the upcoming fiscal year would be to make it easier to raise the Sh40.8 trillion in taxes necessary to carry out the 2023–24 budget. As a result, of the Sh10.48 trillion that would be used to service the government's debt, 25.686 percent of the total amount the ministry receives will go toward debt repayment.
In other words, of the Sh100 that the ministry collects, approximately Sh26 will go toward paying off debt.
At the end of April 2023, Tanzania's entire national debt stock—which includes obligations owed by both the governmental and commercial sectors—was $42.26 billion (or roughly Sh97 trillion).
But yesterday, Dr. Nchemba informed the House that a government examination of the sustainability of the debt had shown that it was so in the short, medium, and long terms.
“In order to have correct information on the national debt control, the Ministry has conducted an analysis of the same for a period of 20 years, starting from the 2022/23 fiscal year. The results show that the government debt is sustainable in the short, medium, and long terms,” Dr. Nchemba told the House in Dodoma yesterday.
According to the research, Tanzania's debt-to-gross domestic product (GDP) ratio is now 31.8%, which is much lower than the maximum of 55%. As of April 2023, Sh7.4 trillion had been paid out of the Sh9.1 trillion allocated for debt payments for the current fiscal year.