- The new growth plan is more liberal and seeks to open up key areas of the economy as the country shifts to boost its infrastructure projects by completing the $7.3 billion new Central Railway Line to standard gauge and the $2.89 billion Mtwara Liquefied Natural Gas Plant.
- The taxpayers will also have to fork out more to afford the funding of these grand projects with the country’s Treasury projecting the annual tax revenue collection rising from 13.8 per cent of GDP last year to 17.1 per cent in the 2020/21 financial year.
- The grand plan also seeks to increase manufacturing exports from 24 per cent to 30 per cent by 2020.
Tanzania is looking to raise $45.89 billion to finance its second industrialisation plan, which will see it increase its development spending to $27.66 billion. This is part of its plans to become a middle-income nation by 2025.
Dar hopes to raise $45.89 billion from taxes, as the government seeks to reduce its reliance on donor funding, which has been declining over the years.
“In order to meet the financial requirements of this plan, traditional sources of financing need to be revamped. Securing additional resources is a priority for both the government and the private sector, particularly for implementing the identified core resource-intensive infrastructure, productive and social services,” Tanzania’s Treasury says of the its second five-year development and transformation plan.
Tanzania has singled out the revival of the national carrier Air Tanzania, completion and operationalisation of Mlonganzila and Dodoma Schools of Medicine and strengthening of its training and scholarship provision fund for scientists and engineers.
Already, President John Magufuli’s government has invested in Air Tanzania’s revival and boosted its fleet.
The new growth plan is more liberal and seeks to open up key areas of the economy as the country shifts to boost its infrastructure projects by completing the $7.3 billion new Central Railway Line to standard gauge and the $2.89 billion Mtwara Liquefied Natural Gas Plant.
Other projects lined up are the construction of the $7.03 billion Mtwara-Liganga-Mchuchuma SGR Line; the construction of Liganga industrial park at a cost of $3.54 million; the construction of Mtwara Petrochemical Special Economic Zone at $4.82 million and the construction of Bagamoyo Special Economic Zone at $9.64 million.
There are also plans to expand Tanga port; develop the Mtwara Development Corridor and construct the Uganda oil pipeline.
The government is aiming to increase foreign direct investment (FDI) to $9 billion by 2021 from the current $2.14 billion by improving its ease of doing business. The country has been accused of failing to attract FDI in its high-growth areas of infrastructure and agriculture. China has become the latest source of FDI and this is expected to continue.
Tanzania is currently waiting for $4.2 billion inflow in foreign direct investment, which will be twice its current amount. The investment is expected in the mining sector.
“We got someone who is bringing investment that’s more than the annual combined investment that we have been getting. Given the current regime, we stand to achieve the target and triple the volume of investments coming into the country,” said the head of the Tanzania Investment Centre, Clifford Tandari.
The taxpayers will also have to fork out more to afford the funding of these grand projects with the country’s Treasury projecting the annual tax revenue collection rising from 13.8 per cent of GDP last year to 17.1 per cent in the 2020/21 financial year. In the current financial year, the government plans to collect $6.62 billion, and $11.38 billion over the next four years.
On Wednesday, the Tanzania Revenue Authority announced that its first half tax revenues for the current financial year were up by 12.7 per cent to $3.26 billion.
“In the first six months of 2016/17 (July-December), TRA collected a total of $3.26 billion compared with $2.82 billion shillings collected over the same period in the 2015/16 financial year,” the authority said in a statement.
Tanzania is also hoping to increase its electrical power generation capacity from the current 1,570MW to 4,915MW by 2020. It also plans to increase connectivity to power to 60 per cent of population in 2020, compared with the current 36 per cent of the population.
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On Tuesday, Tanzania’s Energy Ministry said it was seeking a loan of $200 million from the World Bank for its state power supplier Tanzania Electric Supply Company (Tanesco), for ramping up its operations. The country faces chronic power shortages due to its over-reliance on hydro-power dams and Tanesco aims to add about 2,000MW in gas-fired generation by 2018, as it seeks to build the Mtwara Gas Plant.
The grand plan also seeks to increase manufacturing exports from 24 per cent to 30 per cent by 2020. The Bank of Tanzania’s Monthly Economic Review for November last year shows that the country’s value of export of goods and services in the year increased by 8.7 per cent, boosted by gold, sisal and cloves. Its total export to October last year stood at $8.32 billion, with manufacturing being $1.9 million.
The country also plans to increase its revenues from tourism from the current $2 billion to $3.6 billion and expects tourism numbers to rise from 1.14 million to two million over the next four years.
The treasury is banking on value added tax introduced two years ago on tourism services — for game drives, access to national park fees and ground transport services — to boost revenues in the next four years.
