Among its eight main macroeconomic targets for the new financial year, the government will seek to further boost the national gross domestic product (GDP) and maintain a single-digit inflation rate, Finance and Planning Minister Philip Mpango told the National Assembly.
Real GDP grew from 7.0 percent in 2016 to 7.1 per cent in 2017, and a further growth is targeted for 2018, he said when presenting the Economic Survey Report of 2016 and National Development Plan for 2017/18.
The government is also looking forward to increasing tax collections to 14.2 of GDP, while government spending is projected at 24.9 percent of GDP and the budget deficit including grants is projected at 3.8 per cent of GDP, he added.
According to the minister, the government will ensure adequate foreign exchange reserves covering at least four months of goods and services imports, while striving to maintain stability of the Tanzanian shilling.Mpango also named priority projects for 2017/18, including the Dar es Salaam-Kigoma standard gauge railway construction, aircraft purchases for Air Tanzania Company Limited, and developing iron ore and coal mining projects in Liganga and Mchuchuma.
Other projects include the establishment of more special economic zones, construction of a Liquified Natural Gas (LNG) plant in Lindi Region, and development of a sugarcane plantation and sugar production plant at Mkulazi.He said most of these projects were initiated in 2016/17 and will be treated as ongoing projects. “These projects are expected to deliver high multiplier effects as envisioned in the Tanzania Development Vision 2025 and the plan itself,” he explained.
The government will also during the next financial year focus on other areas like interventions for fostering economic growth and industrialisation, such as developing the TAMCO Industrial area in Kibaha, and reviving the General Tyre plant and Engeruka valley soda ash project, both in Arusha, he added.
Another focus area will be continuing to finance free basic education and extend loans and subsidies to higher learning students, purchasing learning equipments for students with special needs, expanding and rehabilitating the Dodoma regional library, and building five VETA (vocational training) colleges in Geita, Simiyu, Njombe, Rukwa and Kagera regions.
The government in its quest to build an industrial economy will also continue to make concerted efforts to create a conducive environment for business to prosper.
Efforts will continue to provide capital to domestic development banks like TIB and TADB, Mpango said.To finance the overall plan during 2017/18, the minister said the government has allocated 11,999.6 billion/- for implementing its development projects, equivalent to 38 per cent of the total budget. Of this amount, 8,969.8bn/- will come from local funds while 3,029.8bn/- is to be sourced externally.
Allocation of funds for development projects has increased from 11,820.5bn/- in 2016/17 to 11,999.6bn/- in 2017/18. “The increased amount is 1.2 per cent higher than the government target of allocating 11.80 trillion/- for development projects annually,” said minister Mpango.
On the national economy, he noted that average real GDP growth in 2016 was 7.0 per cent, same as in 2015, albeit below the projected 7.2 per cent as economic activities fell short of projected targets.
The most hit sectors were agriculture which grew by only 2.1 per cent compared to the projected 2.9 percent; trade and maintenance which grew by 6.7 against a 7.8 percent projection; food and accommodation services which grew by 3.7 per cent against expectations of 8.0 percent; and administrative services which grew by only 2.1 per cent compared to a 6.3 percent projection.
But there were economic activities which surpassed targets, including information and communication (13.0 percent growth against a 12.1 projection), transport and storage (11.8 percent growth against the 8.0 percent target), mining and quarrying (11.5 percent growth against a 9.2 percent target), and manufacturing (7.8 percent growth against a 6.7 percent target).
The minister told the House that during 2016, GDP was 103,744,606 million/- at current prices, whilst the Tanzania mainland population was estimated at 48,676,698 people, inferring growth of per capita income to 2,131,299/- compared to 1,918,897/- in 2015, being an increase of 11.1 percent.