-Outlines frugality measures
-To issue USD 500M Eurobond

By Shermarx Ngahemera

The government is adamant on the provisional budget of 11.1trn/- despite of having an obvious deficit of more than 3trn/- the African has learnt.
Minister for Finance and Economic Affairs, Mustafa Mkulo is confident that based on the existing plans the budget is tenable and urged people to be restive as everything was under control.
He said getting the money to plug the deficit was feasible as the country’s credit rating was high based on good past performance record in loan repayment.
Mkulo outlined austerity measures and fund raising campaigns to meet the anticipated budget gap.
He said the government would borrow locally more than 1trn/-and the Stanbic Financial Group has already indicated cash outlay of USD 250M as loan to the government and other financiers are lining up for the loan while traditional donors some like Ireland are having a rethink of their boycott in the General Budget Support (GBS).
On top of the local loans the government plans to borrow externally through the issue of the Eurobond worth USD 500M resuscitating the 2008 initiative that was left due to the global financial crunch; a three man task force has been established to proceed with the financial quest abroad.
Mkulo dismissed the criticisms on his plans especially the local borrowing and issue of the Eurobond since are expensive sources but he said it was the right strategy to get the money on time and implement the development projects that have synergies for job creation and value addition on the economy.
“The money will be used to finance development projects that include roads, railways, bridges, irrigation infrastructure, ports water and electricity that have the propensity to stem off poverty and increase economic growth without disturbing the macro economic and fiscal fundamentals,” he said.
He observed that even the International Monetary Fund (IMF) supports the moves since they have the ability to generate repayment money.
Critics argue that extensive local borrowing would deny private establishments the necessary finance to their activities as most banks prefer the less risky government bonds and bills to the private loans.
The World Bank (WB) Country Director for Burundi, Uganda and Tanzania, John McIntire queried Tanzania’s intention to borrow expensively in external money markets when the WB was around and offers cheaper rates.
He said effective next financial year the government is going to insist on realizing the value for money whereby foreign expensive but less durable furniture have been banned, while rigorous measures to monitor the payroll shall be instituted to avoid ghost workers, and house allowances are going to be scheduled and not based on the salary, and LUKU meters for prepaid electricity shall be established at government offices to avoid accumulated bills.