Ministry of Finance and Economic
The Ministry of Finance and Economic, or the Treasury as it is sometimes called, is most often referred to universally as the heart of the government. When the heartbeat of the government, the Treasury, stops, the nation collapses.
And that is why at the beginning of every fiscal year, the people are told about the state of the economy. That is when the Treasury Minister presents the performance report of the country’s economy, stating where the economy performed well and where it performed below expectation, giving out reason either way and laying down remedial plans.
The ministry also explains to the people through their representatives in the parliament on what they should expect in the following years in terms of economic development. The Ministry of Finance is one among the ministries established soon after independence in 1961, and has seen thirteen Ministers and more than ten deputy ministers.
The first Minister to hold the finance portfolio was Sir Ernest Vaasey and the first indigenous minister was Paul M. Bomani who held the post from 1962 to 1965. Mr Amir H. Jamal held the post three times; from 1966 to 1972 and came back from 1976 to 1977 and was appointed to the post again in 1982.
Mr Cleopa D. Msuya held the portfolio twice, between 1974 and 1975 and from 1986 to 1989. Next came Mr Edwin Mtei who was appointed Minister for Finance from 1978 to 1981. Another minister who had held the post more than once was Prof. Kighoma A. Malima. He held he post between 1983 and 1985 and again from 1993 to 1994.
Mr Steven A. Kibona headed the ministry between 1990 and 1993 and was replaced by Mr Jakaya M. Kikwete (the current President of the United Republic of Tanzania) who headed the ministry from 1994 to 1995.
Prof. Simon M. Mbilinyi took over from Kikwete from 1995 to 1996. Mr Daniel N. Yona was appointed Minister for Finance from 1997 to 2000 and was replaced by Basil P. Mramba who headed the ministry between 2001 and 2005, handing the portfolio over to Ms Zakia H. Meghji (the only woman to head the ministry so far) between 2005 and 2007.
The incumbent, Mr Mustafa H. Mkulo, was appointed to the post in 2008 and has the privilege to be heading and nursing the heartbeat of the government when the nation is celebrating 50 years of independence.
Again, since independence, the ministry has been given different names depending on the objectives, tasks and functions the ministry was supposed to carry out. In 1962 it carried the name of Ministry of Finance; in 1976 it was named Ministry of Finance and Planning; in 1983 the name was changed to Ministry of State, Planning and Economic Affairs; in 2008 the name changed to Ministry of Finance and Economic Affairs; and in 2011, 50 years after independence, the name has been changed to Ministry of Finance.
Tanzania’s economic performance has experienced an up and down trend for most of the time dictated most often by the world economic factors like unpredictable commodity
prices especially fuel. In 2009 the economy grew by 6.0 per cent compared to 7.4 per cent the previous year.
The fall was attributed to effects of the global economic slump although it picked up again from 2010 helped by increased government spending to boost agricultural output and the building of infrastructure. Strengthened domestic revenue collection and containing the growth of unmatched recurrent government expenditures are some of the government’s key priorities to try to bridge the gap caused by dependence of foreign funding.
But indicators of economic activity during the first half of 2009 suggested that although the global financial crisis affected global growth, it impacted less on developing economies because of their limited degree of integration into world markets. According to the Bank of Tanzania Governor, Prof. Benno Ndullu, this was due to good performance in traditional exports, cement production and the manufacturing industry.
Traditional exports increased to 470.8 million US dollars in 2009, from 418.4 million US dollars the previous year as the agricultural sector recorded a bumper harvest, and cement production increased by 7.4 pee cent in the first three quarters of 2009 to 1.38 million tones, compared with 1.28 million tones recorded during a similar period in 2008, suggesting a strong performance in the construction industry.
Some of the achievements by the government in the past five years include an increase in domestic revenue from 121 peer cent from 2,124.8 billion shillings in 2005/06 to 4,688.3 billion shillings in 2009/10. This means that domestic revenue has more than doubled form an average of 177 billion shillings per month to an average of more than 390 billion shillings per month over the same period.
This was due to government’s efforts in improving tax and nontax revenue administrations. Among the measures taken to strengthen domestic revenue collection include: .Broadening of the tax base, reduction of tax exemptions, sustain macroeconomic stability and improvement of the business environment in order to promote the growth of the private sector.
Effectively implement reforms in the Tanzania Revenue Authority as stipulated in the Third Five-Year Corporate Plan, whose objectives include curbing tax evasion to controlling revenue leakages, raising awareness on the importance of paying taxes, and continuing to streamline the methodology for business tax assessment.
Adjust the tax structure and strengthen the Large Tax Payers’ Department by improving the operational systems. .Strengthen supervision and operations in Customs and Exercise Department by enhancing accountability and application of technology in order to reduce inconveniences to tax payers.
Strengthen monitoring and tracking the movement of cargo from the port of Dar es Salaam to inland container depots, including the use of modern technology. .Strengthen monitoring of fuel imports by ensuring full time efficient operation of flow metres.
To ensure that transit fuel is not sold in the domestic market. .collaborate with respective authorities in controlling adulteration of fuel with the aim of curbing tax evasion and ensure quality of fuel with a view of safe-guarding vehicles and plants operated by diesel.
Finalise review of procedures and identification of new sources of non-tax revenue from ministries, regions and independent departments, with the objective of identifying weaknesses and take remedial measures in increasing revenue collection.
Despite the achievements, however, the government faces several budgetary challenges including inadequate domestic revenue to finance government programmes, particularly infrastructure projects such as railways, ports, roads, airports and irrigation; social services (education, health, water) and agriculture. Other challenges are the existence of large informal sector which is not adequately integrated in the formal economy, hence contributing minimally to domestic revenue.