MINISTRY OF FINANCE AND ECONOMIC AFFAIRS QUARTERLY ... · the united republic of tanzania ministry of finance and economic affairs quarterly economic review and budget execution report

THE UNITED REPUBLIC OF TANZANIA

MINISTRY OF FINANCE

AND ECONOMIC AFFAIRS

QUARTERLY ECONOMIC REVIEW AND BUDGET

EXECUTION REPORT

FOR FISCAL YEAR 2010/11

JULY – SEPTEMBER 2010

DAR ES SALAM

NOVEMBER 2010

1

SUMMARY

The Government’s main policy objectives for the financial year 2010/11 is to sustain the

macroeconomic stability through implementation of appropriate fiscal and monetary policies, aimed

at stimulating economic activities benefiting from the rebound in global economy. In 2010/11 and in

the medium term, the emphasis is on, among other priority areas, infrastructure and agriculture with

the aim of accelerating economic growth and poverty reduction in line with MKUKUTA II.

The preliminary results of macroeconomic performance during the first two quarters of 2010 indicate

improvement in economic activities with real GDP growth trend in line with annual target of 7.0

percent. Annex 1 and 2 summarize quarterly economic performance and Annex 3 presents current

account balance.

Overall budget performance for the first quarter of the fiscal year 2010/11 was satisfactory in terms

of tax revenue except for non tax revenues which performed below target. Recurrent expenditure

performed at 94.6 percent of budget estimates. The slower execution in development expenditure is

expected to correct during the coming quarters. Overall Government operations resulted in a net

domestic borrowing of TShs507 billion. The summary of Central Government operations is presented

in Annex 4.

Revenue collections in the first quarter of 2010/11 were TShs 1,255.7 billion, which is 94.2 percent of

estimates. Good performance was observed in Domestic sales taxes and other taxes category. There

were noticeable underperformances in non tax revenue collection as well as income and import

taxes. Details of revenue in major components are presented in Annex 5.

Recurrent expenditure excluding CFS for the first quarter of the fiscal year stood at 99 percent of

estimates. Development expenditure was 61 percent of estimates mainly due to delays in

disbursement of foreign project funds. Domestic Interest payments were as per estimates while

foreign interest payments were below estimates. The underperformance experienced in the first

quarter is expected to correct in the coming quarters because all projected foreign interest was paid

as per their due dates and most of them are expected to due in second quarter and fourth quarter.

Details of Expenditure by category are presented in Annex 6.

2

Disbursements of budget support were modest during the first quarter and majority is expected in the

second quarter of the year. Project grants and loans were significantly lower than estimated while

basket support funds were broadly in line with estimates. Net Domestic Financing of the budget

amounted to Tsh.507 billion. Details of grants and financing categories are presented in Annex 7.

MACRO ECONOMIC PERFOMANCE

Economic Growth

1. The real GDP growth in 2009 slowed down to 6.0 percent owing to the impact

of the global financial crisis as well as drought and floods that occurred in some parts

of the country in 2008/09 season. These effects were however transitional, and hence

the GDP growth is projected to bounce back to 7.0 percent in 2010. The projected

trend will benefit from continued recovery in the world economy particularly during

the first half of 2010. According to October World Economic Outlook (WEO),

economic recovery continued to strengthen during the first half of 2010, with global

activity expanding at an annual rate of about 5.25 percent, which is 0.5 percentage

point higher than the July projection. Similarly, domestic economic activities are

expected to strengthen and expand further compared to last year. Preliminary

national account statistics indicates that real GDP growth is estimated at 7.1 percent

in the second quarter of 2010 from to 3.4 percent attained during the corresponding

period in 2009. This growth was attributed to good weather which led to increase in

agricultural activities, thus good harvest of major food crops namely: maize; paddy;

millet/sorghum and cassava. Other economic activities which recorded notable

growth in the second quarter of 2010 include: fishing; mining and quarrying;

manufacturing; wholesale and retail trade; electricity and gas; and real estate and

business services. On quarterly basis, the Real GDP growth in the second quarter of

2010 went up slightly by 0.1 percentage point from 7.0 percent recorded in the first

3

quarter of 2010. The graph below illustrates the trend in GDP at constant market

prices on quarterly basis.

Figure 1: Quarterly Real GDP Growth (2004 – 2010)

0

2

4

6

8

10

12

2004 2005 2006 2007 2008 2009 2010

Perc

ent

Year

Q1 Q2 Q3 Q4

Source: Ministry of Finance and Economic Affairs

Inflation Developments

2. Inflation pressures experienced in the first half of 2010 eased during the

quarter ending September. A downward trajectory has been recorded from 7.2

percent in June 2010 to 6.3 percent in July and further to 4.5 percent as of end

September 2010. This trend was a result of favourable weather conditions in the

2009/10 crop season which led to improvement in food supply. Food supply is

expected to remain good in the coming months, leading to further decline in food

inflation and hence headline inflation. This is also based on the assumption that

monetary and fiscal policies will remain prudent, and oil prices will stabilize.

4

External Trade

3. During the quarter under review, exports of goods and services went up by

28.1 percent compared to a decline of 0.4 percent in the quarter ending June 2010.

Exports of goods and services increased to USD 1,586.9 million in the quarter ending

September 2010 from USD 1238.9 million in April - June 2010. Export of goods grew

by 24.6 percent compared to a decline of 1.7 percent in the quarter ending June 2010

mainly due to growth in traditional exports particularly the value of coffee and

tobacco which grew by 63.9 and 29.0 percent respectively in the same period. On the

other hand, export unit prices of most of traditional exports showed recovery in line

with the recovery of the global economy. The value of non-traditional exports grew

by 19.1 percent in the first quarter of 2010/11 mainly due to increase manufactured

goods. Commencement of gold export by Buzwagi Gold Mine in June 2009 coupled

with higher gold prices in the world market is expected to boost the performance of

gold exports. The service receipts also grew by 34.3 percent in the quarter under

review compared to a growth of 1.9 percent in the quarter ending June 2010,

following recovery in tourism and transportation activities.

4. The total value of imports of goods and services grew by 6.4 percent in first

quarter of 2010/11,compared to a decline of 0.4 percent recorded in fourth quarter

2009/2010 mainly due to increase in import of capital goods as a result of expansion

of economic activities during that period. Imported goods increased by 5.5 percent

while service payment increased by 10.8 percent. Goods account deficit slowed down

to USD 804.2 million during the first quarter of 2010/11 from a deficit of USD 906.0

million recorded in the last quarter of 2009/10, equivalent to a decline of 11.2

percent. This was mainly on the account of higher growth in exports of goods and

services than imports.

5

Money Supply

5. During the period ending September 2010, extended broad money supply

(M3) recorded an annual growth of 22.6 percent, down from 26.4 percent registered

in August 2010, but higher than 19.0 percent recorded in September 2009. Likewise,

broad money supply (M2) grew by 20.8 percent during the period under review

compared with 24.5 percent recorded in the preceding month but higher than 19.9

percent recorded in September 2009. The decline in the growth trend of money

supply was due to the decline in the annual growth rate of both net domestic assets

and net foreign assets of the banking system.

Credit Developments

6. During the period ending September 2010, credit to private sector grew by

18.5 percent, slightly lower than 18.9 percent recorded in the period ending August

2010, but lower compared with 26.6 percent recorded in September 2009. During the

same period, personal loans sustained its dominance, accounting for 20.1 percent,

followed by trade activities which accounted for 16.9 percent, manufacturing 15.2

percent, agriculture 12.1 percent and transport and communication 9.2 percent.

Figure 2: Share of Banks’ Credit to Various Activities (% _ Sept 2010)

6


Interest Rates Development

7. Interest rates offered by banks exhibited a rising trend in September 2010

when compared with the rates recorded in the preceding month. Specifically, the

overall time deposits rate increased to 6.03 percent in September 2010, from 5.55

percent registered in the preceding month, but the rate was lower than 6.73 percent

recorded in corresponding period in 2009. On the other hand, the rates charged by

banks took downward trend during the month under review. The overall lending rates

decreased to 14.31 percent from 14.40 percent recorded in August 2010. The spread

between short term lending rates (up to one year) and one year time deposit rate

narrowed to 6.17 percentage points in September 2010 from 7.24 percentage points

recorded in the preceding month. This implies that cost of funds in September 2010

was relatively cheaper when compared with the rates in the preceding months.

Exchange Rate

8. During the month ending September 2010, the average value of the shilling

against USD depreciated by 3.43 percent to Tshs. 1,494.81 per USD, from Tshs.

1,445.23 per USD recorded in the corresponding month. On annual basis, the shilling

depreciated by 14.21 percent from Tshs 1,308.82 per USD recorded in September

2009.The recent depreciation of the Tanzania Shilling against USD was mainly driven

by seasonal demand for foreign exchange.

REVENUE BY SOURCE

9. The Government has continued to implement measures to improve revenue

collections to sustainably increase the capacity to finance the expenditure. These

measures include improving payment systems through banks, expanding the tax base

7

by registering new taxpayers; continue implementing the TRA Third Five Year

Corporate Plan by ensuring sufficient capacity in revenue collection and reviewing

exemptions to reduce magnitude of abuses.

10. During the first quarter of the year 2010/11, total tax collections amounted to

Tshs. 1,193.1 billion equivalent to 96 percent of estimated TShs. 1,239.6 billion. Non

tax revenue continued to perform below the estimates during this period. The actual

revenue collection from this category was Tshs. 62.7 billion against Tshs. 92.2 billion

being 68 percent of the estimates.

Taxes on Imports

11. For the first quarter of the fiscal year, collections from taxes on imports were

Tshs. 453.6 billion reflecting the performance level of 95 percent of estimated TShs.

478.3 billion. The collection for the period was above the levels realized in the

corresponding period of 2009/10 by 15 percent. Despite this underperformance,

good performance was observed in import duty. The actual collections from this

category amounted to Tshs. 108.8 billion against the target of Tshs. 109.1 billion

representing a performance level of 100 percent. On the other side, excise duty on

petroleum; excise duty on other products and VAT on imports performed at 93

percent; 88 percent and 94 percent of estimates respectively. The decline in volumes

of petroleum imports contributed to the observed shortfall. However, on cumulative

basis, year on year comparison indicates that these categories grew by 7 percent; 4

percent and 19 percent respectively compared to the corresponding period in

2009/10.

8

Taxes on Domestic sales

12. The actual tax collection from domestic sales category was TShs. 286.7 billion

or 98 percent of estimated Tshs. 291.4 billion. The underperformance is attributed to

lower collections recorded by six sources namely: beer, cigarettes, soft drinks, sugar,

telephone, and electricity, which performed at 93 percent, 76 percent, 68 percent, 40

percent, 95 percent and 52 percent respectively. However, cumulative collections

from domestic sales for the same period last financial year were TShs. 252.5 billion,

reflecting an increase of 14 percent. The underperformances, among others, are

attributed to temporary shut down of sugar factory(s) (Mtibwa Sugar) to allow

maintenance which delayed production and hence low revenues. Other reasons were:

end-of-year adjustments and planning for some companies such as Tanzania

Cigarette Company which increased purchases and ultimately deductible input VAT;

and change in consumer behaviour on soft drinks as a result of cold period/winter

affecting distribution trend by producers. This resulted in pile-up of stock and hence

reduced production.

Income Tax

13. The overall Income Tax collection during the first quarter was TShs. 373.5

billion against Tshs. 374.6 percent or 100 percent performance level. This is an

increase of 13 percent of a collection registered in the same period in 2009/10 fiscal

year. PAYE, Individuals, Corporate and parastatals performed above the target, while

Withholding tax, Rental tax, and tax on other income underperformed during the

period.

Other taxes

14. During the quarter ending September 2010, actual collections from other taxes

category were TShs. 122.5 billion, which was 87 percent of estimates. The shortfall in

9

absolute terms is attributed to poor collections from Business skill development levy;

fuel levy; stamp duty; departure service charge; gamming tax; and treasury voucher

cheque. Only collections from motor vehicle taxes were above the target. The actual

revenue collection from this category was Tsh. 22 billion against Tsh. 21.3 billion

estimated.

Non tax revenue

15. Collections of Non tax revenue have remained below the targets for the

quarter. The collections were 68 percent of estimates. However year on year

comparison indicates a growth of 19 percent from TShs 52.5 billion attained in

2009/10.

Details highlighting performance by major revenue categories are presented in figure

3 below.

-

200

400

600

800

1,000

1,200

1,400

1,600

Taxes on Imports

Taxes on Domestic Sales

Income Tax Other Taxes Non Tax Revenue

LGAs Own Source

Total Revenue

In B

illi

on

Sh

illin

gs

Figure 3: Revenue Performance July-September 2010

Estimates Actual July-Sept 2009


10

EXPENDITURE BY CATEGORY

16. Government expenditure policies for the financial year 2010/11 focus on

increasing efficiency in the use and management of public funds with particular

emphasis on areas that are potential for accelerating economic growth and reduction

of income poverty.

17. Total expenditure for the first quarter of 2010/11 was TShs 1,980.7 billion,

being 84 percent of estimate and 18 percent of total budget for the year. Out of this

amount, TShs 1,355.8 billion was recurrent expenditure excluding CFS while TShs

476.4 billion was total development expenditure. Expenditure on CFS was TShs 148.4

billion being 16 percent of the budget for the year. Total expenditure indicates an

increase of 17 percent compared to the corresponding period in the preceding year.

There was a relatively good performance in recurrent expenditure execution partly

due to timely spending in goods and services related to the preparation for October

2010 General Election, examination expenses and other regular government

operations. Slow execution in development spending was primarily due to delays in

disbursement of foreign project funds. Figure 4 below depicts expenditure

performance for major recurrent expenditure categories for the first quarter of

2010/11.

11

-

100

200

300

400

500

600

700

800

Wages and salaries Parastatal

Wages Fuel Levy

Other ChargesDevelopment Expenditure

Tsh

billi

on

Figure 4: Total Expenditure by category July-Sept 2010

Estimates Actual Expenditure Expenditure 2009/10


18. Expenditure in wages and salaries was TShs 575.6 billion, 102 percent of

estimates. Year-on-year comparison indicated a 39 percent increase from 2009/10.

This increase was due to adjustment of Government employee wages and salaries

effective from July 2010.

19. During the first quarter, TShs 34.9 billion was paid as domestic interest while

foreign interest payment amounted to TShs 11.3 billion. This outturn was equivalent

to 101 percent and 64 percent of estimates respectively. Total interest payment was

88 percent of the estimates and 33 percent higher than the amount paid in the

preceding year.

20. Total development expenditure for July - September 2010 was TShs 476.4

billion, which is equivalent to 61 percent of estimates. Locally financed development

expenditures was TShs 148.3 billion, being 89 percent of the estimates and 2 percent

lower than the amount spent in the corresponding period of the preceding financial

year. Foreign development expenditure was TShs 328.1 billion, equivalent to 54

percent of estimates. The low performance was mainly on account of delays in

disbursement of foreign project funds.

12

GRANTS AND FINANCING BY COMPONENT

21. The Government continue to coordinate effective implementation of the Joint

Assistance Strategy for Tanzania (JAST); maintains good relationship with

Development Partners and the international financial institutions; and seek their

financial assistance to compliment ongoing efforts in implementing MKUKUTA II in

line with the objectives of the Millennium Development Goals and National

Development Vision 2025.

22. The Government will continue to use grants and concessional loans from

Development Partners as major foreign sources of financing development

programmes. Starting 2010/11 the Government has included commercial loans for

the purpose of financing part of the development budget.

23. Foreign assistance in the form of General Budget Support (grants) amounted

to TShs 148.8 billion against the target of TShs 185 billion, while project and basket

funds were TShs 34 billion and TShs 73.9 billion respectively. TShs 26.3 billion is

project funds received under the MCA (T) to finance development projects. Therefore,

total grants amounting to TShs. 283.1 billion were disbursed during the first quarter

of 2010/11.

24. The overall balance of Tshs 723.9 billion was financed by project loans of TShs

172.8 billion, basket loans of TShs 47.3 billion and a net domestic borrowing of TShs

507 billion. Repayment for foreign debt amounted to Tshs. 3.3 billion. Annex 7

provides detailed grants and financing for the period.

13

0

50

100

150

200

250

300

350

400

450

Programme Grants Project Grants

Basket Support

Grants

MDRI

MCA (T) USA

In B

illio

n S

hilli

ngs

Figure 5: Foreign Grants July - September 2010

Estimates Actuals July- Sept 2009/10


-50

0

50

100

150

200

250

300

350

Programme Loans Project Loans

Basket Support Loans

Non Concessional

Borrowing

Amortisation foreign

In B

illio

n S

hill

ing

s

Figure 6: Foreign Financing July- September 2010

Estimates Actuals July- Sept 2009/10


25. For the non-concessional borrowing, negotiations are in progress with various

banks and financial institutions. The Government is scrutinizing the proposals to

identify potential lenders to raise the total borrowing of USD 525 million without

endangering fiscal position or debt sustainability. In addition, the government will

cautiously evaluate and use non-concessional borrowing for key infrastructure

projects designed to ensure efficiency gains. The projects to be implemented include

14

those aimed at increasing capacity for energy generation, and construction and

rehabilitation of roads and railways that are critical for improving the integration of

transportation networks.

Overview of National Debt

26. The Government has continued to manage its debt prudently by

maximizing borrowing from concessional sources and analysing risk associated with

new borrowings. In the first quarter of 2010/11, the Government carried out its Debt

Sustainability Analysis which reveals that national debt is sustainable. The national

debt stock, comprising of external and domestic debt, at the end of September 2010

stood at USD 8,498.07million, out of which external debt was USD 6,196.30 million of

which Disbursed Outstanding Debt (DOD) was USD 5,451.9 million and interest

arrears USD 744.4 million; and domestic debt USD 2,301.77 million (excluding

contingent liability, liquidity paper and non securitized debt).

Figure 7: National Debt and Debt-to-GDP Ratio

76

08

.6

65

96

.8

71

45

.1

77

85

.4

82

06

.4

82

88

.0

59

74

.7

70

44

.2

75

89

.6

10

53

8.3

72.8

62.9 63.5 64.459.8 57.9

39.536.5 37.7

45.9

0

10

20

30

40

50

60

70

80

0

2000

4000

6000

8000

10000

12000

20

00

/01

20

01

/02

20

02

/03

20

03

/04

20

04

/05

20

05

/06

20

06

/07

20

07

/08

20

08

/09

20

09

/10

Total Debt Debt-to-GDP-Ratio

Pe

rce

nta

ge

USD

Mill

ion

Years

Source: Ministry of Finance and Economic Affairs and Bank of Tanzania

15

27. External debt stock as at end September 2010 stood at USD 6,196.30 million

compared to USD 5897.28million recorded at the end of June 2010 (table below)

equivalent to an increase of 5 percent. The increase was due to an increase of new

disbursements and unpaid interest arrears to Non Paris Club members countries

which have not concluded debt rescheduling arrangement.

Public External Debts stock Million USD

30th June 2010 30th July 2010 30th August 2010 30th September 2010

DOD 5,178.68 5324.4 5,264.80 5451.9

In Arrears 718.6 731.2 735.60 744.4

Debt Stock 5897.28 6,055.60 6,000.40 6196.3

28. The profile of DOD by borrower category indicates that the Central

Government debt accounted for 80.7 percent while private sector and public

corporations debts accounted for 13.7 percent and 5.6 percent of the total external

debt stock respectively.

Figure 8 : Disbursed External Debt by Borrower, June 2010

Central Government

80.7%

Public Corporation

5.6%

Private Sector13.7%


16

29. In terms of creditor category, major multilateral creditors (IDA, AfDB and the

IMF) accounted for, about 60.0 percent of DOD and 90.7 percent of the multilateral

debt as shown in figure 9. On the other hand, Japan/JICA, Brazil and China are the

main bilateral creditors whose debt accounted for 69.5 percent of the bilateral debt.

Figure 9: External Debt by Creditor, September 2010

IDA

44.2%

AfDB

9.9%

IMF

5.4%

Japan

4.3%

Brazil

3.7%

China

2.8%

Others

29.5%


30. The analysis of external debt by currency composition reveals that as at the

end of September 2010, Tanzania’s medium to long-term external debt is largely

dominated by USD and Euro, which, accounted for 55.3 percent and 24.2 percent,

respectively (Figure 10). The dominance of USD in external debt portifolio may pose

significant exchange rate risk given historical and recent experience trend in

depreciation of Tsh. against USD.

Figure 10: External Debt by Currency composition

17

US Dollars55.3%

Yuan2.4%

Yen 11.6%

Euro24.2%

Others6.4%


External Debt Service

31. The overall external debt service during the first quarter was USD 13.19 million

of which USD 5.52 is principal repayment and USD 7.67 million is interest payment

Jul, 2010 Aug, 2010 Sept, 2010 Total

Principal 0.03 2.31 3.18 5.52

Interest 1.55 0.81 5.31 7.67

Total debt service 1.58 3.11 8.50 13.19

18

Domestic Debt

32. Total public domestic debt stock1 as at end of September, 2010 stood at TZS

3,330,894.93 million (USD 2,301.77 million) compared to Tshs 2,376,889.27 million

recorded as at end of June 2010. The increase is attributed to rising financing needs

of the Government for infrastructure development, inclusion of non securitized debt

in debt Stock and issuance of Treasury bills, bonds for monetary policy

implementation and domestic debt market development respectively. It is worth

noting that the above debt position does not include contingent liabilities as they

need to be verified before being included in the debt stock.

Public Domestic Debt by Instruments

33. Public domestic debt stock is comprised of Treasury bonds, Treasury bills,

Stocks and Other debts2. The notable characteristic of domestic debt is the large

proportion of other debts in domestic debt portfolio which is 35.8 percent in

September 2010 primarily due to issuance of government guarantees to MDAs.

Securitized debt was mainly in the form of Treasury Bonds and Bills which accounted

for 35.4 percent and 24.7 percent of domestic debt respectively. The remaining 4.1

percent was in the form of government stocks.

1 Exclude liquidity papers, contingent liabilities and non securitised debt 2 Other debts comprise of non-performing assets such as public corporation debts and central government debts

arising from issuance of Government Guarantee to MDAs

19

Figure 11: Domestic Debt by Instruments, June 2001 and June 2010

T. Bonds35.4%

Stocks4.1%Tbills

24.7%

Other Debts35.8%


Government Securities by Holder Category

34. Tanzania’s domestic debt market is underdeveloped and is dominated by few

participants. Most domestic debt is held by commercial banks, accounting for 50.9

percent of securitized debt as of end September 2010. The relatively low risk in

Government securities as compared to lending to private sector, as well as the

expansion of the banking sector explains the dominance of commercial banks in the

securities market. Bank of Tanzania ranked the second holding 25.5 percent followed

by pension funds holding 14.8 percent.

Figure 12: Domestic Debt by Holders

Central Bank25.5%

Commercial Banks50.9%

Others1.4%

Non Banks2.1%

Pension Funds14.8%

Insurance Funds5.4%

2010

20


Domestic Debt service

35. Total Domestic debt service for the first quarter of financial year 2010/11 was

Tshs 195,777.46 million. Out of domestic debt service, Tshs 164,114.40 million, being

principal which was rolled over while interest rate paid amounted to Tshs. 31,663.06

million.

Annex 1: Gross Value Added by Activity at Constant 2001 Prices in Million Tshs

2004 2005 2006 2007 2008 2009 2010

Q1 2,498,605 2,640,018 2,899,123 3,028,217 3,242,539 3,413,748 3,653,403

Q2 2,807,750 3,022,882 3,291,155 3,483,196 3,731,409 3,857,106 4,130,332

Q3 3,281,178 3,555,187 3,757,557 4,027,153 4,384,278 4,632,950

Q4 2,652,203 2,850,003 2,933,328 3,263,356 3,470,118 3,817,497

Annex 2: Gross Value Added by Activity at Constant 2001 prices – Percentage Changes

2004 2005 2006 2007 2008 2009 2010

Q1 7.8 5.7 9.8 4.5 7.1 5.3 7.0

Q2 6.2 7.7 8.9 5.8 7.1 3.4 7.1

Q3 7.3 8.4 5.7 7.2 8.9 5.7

Q4 10.2 7.5 2.9 11.3 6.3 10

Annex 3: Current Account Balance

Millions of USD

Item

2009p 2010 2010

p %

Jul - Sep Jan - Mar Apr - Jun Jul - Sep Change

Goods Account (Net) -799.1 -859.1 -906.0 -804.2 -11.2

Exports* 782.2 805.6 792.3 986.9 24.6

Imports 1,581.3 1,664.7 1,698.3 1,791.1 5.5

Services Account (Net) 74.1 15.4 66.0 178.3 170.4

Receipts 527.3 438.4 446.7 600.0 34.3

Payments 453.3 423.0 380.7 421.7 10.8

Goods and Services (Net) -725.0 -843.7 -840.0 -625.9 -25.5

Exports of Goods and Services 1,309.5 1,244.0 1,238.9 1,586.9 28.1

Imports of Goods and Services 2,034.5 2,087.7 2,079.0 2,212.8 6.4

Income Account (Net) -15.1 -12.8 -38.9 -38.7 -0.5

Receipts 46.6 35.0 32.2 39.4 22.4

21

Payments 61.6 47.8 71.1 78.2 9.9

Current transfers (Net) 374.5 27.9 30.5 163.6 436.2

Inflows 392.6 176.7 48.6 186.0 283.0

o/w Official transfers 366.1 148.8 23.8 159.0 568.9

Outflows 18.1 18.1 18.1 22.4 24.2

Current Account Balance -365.5 -828.6 -848.4 -501.0 -40.9

NOTE:

p = Provisional data.

* = Does not include adjustment for informal cross boarder unrecorded

trade

SOURCE: Bank of Tanzania, TRA

22

Revenue 6,176.2 1,374.9 1,255.7 91% 1,107.1 13%

Tax Revenue (Including LGAs own source) 6,003.6 1,331.8 1,255.7 94% 1,107.1 13%

Tax Revenue (Excluding LGAs own source) 5,638.6 1,239.6 1,193.1 96% 1,054.6 13%

Taxes on Imports 2,115.3 478.3 453.6 95% 393.7 15%

Import Duty 493.2 109.1 108.8 100% 91.2 19%

Petroleum 570.8 129.9 120.5 93% 112.1 7%

Excise 570.8 129.9 120.5 93% 112.1 7%

Others 1,051.4 239.3 224.3 94% 190.4 18%

Excise 52.1 11.8 10.5 88% 10.1 4%

VAT on Non-Petroleum imports 999.3 227.4 213.8 94% 180.3 19%

Taxes on Domestic Sales 1,396.6 291.4 286.7 98% 252.5 14%

Excise 404.2 84.0 86.4 103% 76.0 14%

Value Added Tax (VAT) 992.3 207.4 200.4 97% 176.5 14%

Income Tax 1,702.3 374.6 373.5 100% 331.7 13%

PAYE 910.7 202.2 206.9 102% 176.9 17%

Corporate and Parastatals 496.0 114.6 116.1 101% 102.0 14%

Individuals 58.7 11.4 12.6 111% 10.4 21%

Withholding Taxes 186.6 36.0 28.8 80% 31.1 -7%

Rental Tax 40.7 7.9 6.8 86% 7.7 -11%

Other Income 9.6 2.5 2.2 87% 3.6 -39%

Other Taxes 620.9 140.1 122.5 87% 112.6 9%

Business Skil l Development Levy 145.1 30.1 27.0 90% 24.4 11%

Fuel Levy and transit fee 292.2 69.6 58.2 84% 56.9 2%

Stamp Duty 9.0 2.0 1.2 60% 1.4 -12%

Departure Service Charges 30.3 6.7 5.8 86% 4.2 37%

Motor vehicle taxes 96.6 21.3 22.0 103% 17.6 25%

Gaming Tax 4.0 1.2 0.0 0% 0.0

Treasury Voucher Cheque 43.7 9.3 8.0 86% 8.0 0%

Livestock Development Levy 0.0 0.0 0.3 0.1 304%

Refunds -196.5 -44.9 -43.2 96% -35.9 20%

Refunds - VAT -130.1 -26.4 -26.4 100% -26.2 1%

Refunds - other -66.4 -18.4 -16.8 91% -9.7 73%

Non Tax Revenue 365.0 92.2 62.7 68% 52.5 19%

Parastatal Dividends 36.7 15.2 4.2 27% 0.1 6296%

Treasury 16.7 3.7 1.0 27% 1.7 -40%

Ministries and Regions 297.5 70.1 54.9 78% 48.2 14%

TRA Non Tax 14.0 3.1 2.6 84% 2.7 -1%

LGAs own source 172.6 43.1 0.0 0.0


Annex 5: Revenue Performance July - September 2010

Budget

Estimates

July-Sept

2009/10

Actual

Year on year

% change

Bil l ion Shil l ings

Estimates ActualPercent of

estimate

July - September 2010

23

Total Expendjture 10,769.6 2,369.5 1,980.7 84% 1,699.4 17%

Recurrent Expendjture (Excl. CFS) 6,034.5 1,365.4 1,355.8 99% 1,093.2 24%

Wages and salaries 2,205.4 566.2 575.6 102% 415.4 39%

Goods, services and transfers 3,829.0 799.2 780.3 98% 677.7 15%

TRA 126.4 31.6 52.7 167% 31.6 67%

Fuel Levy 292.2 69.6 58.2 84% 56.9 2%

Parastatal wages 461.4 99.1 101.5 102% 77.1 32%

Retention scheme 134.2 13.6 23.6 174% 13.2 79%

Retrenchment costs - - - -

Other goods and services 3,107.1 655.0 602.5 92% 555.8 8%

Transfer to Zanzibar 37.0 8.3 9.3 112% 33.7 -72%

TANESCO (IPTL) 18.0 4.5 2.5 56% 4.5 -44%

Treasury Voucher Scheme 30.0 10.8 7.7 72% 8.0 -4%

Other charges 3,022.1 631.3 582.9 (1.5) 509.6 1.3

Development Expenditure 3,819.1 779.2 476.4 61% 488.3 -2%

Domestic 1,366.1 166.0 148.3 89% 194.1 -24%

Foreign 2,452.9 613.2 328.1 54% 294.2 12%

o/w basket grants 221.6 55.4 73.9 133% 42.1 76%

o/w basket loans 256.2 64.1 47.3 74% 68.8 -31%

o/w MCA (T)- USA 268.8 53.8 26.3 49% 8.2 219%

Interest 364.5 52.1 46.1 88% 34.8 33%

Domestic 235.0 34.5 34.9 101% 32.8 6%

Foreign 129.4 17.6 11.3 64% 2.0 478%

CFS others 551.6 172.8 102.3 59% 83.1 23%


Budget

Estimate EstimateActual

Expenditure

Annex 6: Expenditure by Category July - September 2010 (in billions of Tshs)

July - September 2010July-September

2009/10

Actual

Year on Year

% Change

Billion Shillings

Percent of

Estimate

24

Overall deficit before grants (4,593.4) (994.5) (724.9) 72.9% (592.3) 22.4%

Grants 2,020.9 532.3 256.8 48.2% 539.9 -52%

Programme 631.8 185.0 148.8 80.5% 437.4 -66%

Project 898.8 238.1 7.7 3.3% 50.6 -85%

Basket Support 221.6 55.4 73.9 133.5% 42.1 76%

MDRI (IMF) 0.0 0.0 0.0 1.6 -100%

MCA(T) - USA 268.8 53.8 26.3 48.9% 8.2 219%

Overall deficit after grants (2,572.5) (462.3) (468.1) 101% -52.4 794%

Expenditure Float 0.0 0.0 -468.3 -423.5 11%

Overall Balance (2,572.5) (462.3) (723.9) 157% (309.0) 134%

Financing 2,572.5 462.3 723.9 157% 309.0 134%

Foreign (net) 1,942.5 252.7 216.9 86% 530.0 -59%

Programme (Loans) 189.8 0.0 0.0 339.6 -100%

Project (Loans) 807.6 201.9 172.8 86% 124.5 39%

Basket Support 256.2 64.1 47.3 74% 68.8 -31%

Non-Concessinal Borrowing 731.2 0.0 0.0 0.0

Amortisation Foreign (outflow) -42.3 -13.2 -3.3 25% -2.9 14%

Domestic (net) 630.0 209.6 507.0 242% -221.1 -329%

Bank Borrowing 600.0 209.6 507.0 242% -155.3 -427%

Non-Bank Borrowing 0.0 0.0 0.0 -65.5 -100%

Borrowing/Roll over 797.6 164.1 164.1 100% 132.1 24%

Amortisation of contingent debt 0.0 0.0 0.0 -0.3 -100%

Domestic amortisation/Rollover -797.6 -164.1 -164.1 100% -132.1 24%

Privatisation proceeds 30.0 0.0 0.0 0.0


Billion Shillings

Budget

EstimatesPercent of

estimate

Annex 7: Foreign Grants and Financing July - September 2010

Estimate

July - September 2010 July -

September

2009/10

Actual

Year on year

% changeActual

Annex 8: Domestic Outstanding Debt (Million TZS)

Category Jun-10 Jul-10 Aug-10 Sep-10

Government Stocks 257,886.65 257,886.65 257,886.65 257,081.15

Special Bonds 844,560.30 841,146.24 841,146.24 810,444.30

Ten years Bonds 354,892.20 354,892.20 354,892.20 370,892.20

Seven years Bonds 5,000.00 384,012.94 421,647.94 421,647.94

Five years Bonds 347,479.90 339,479.90 381,479.90 381,479.90

Two years Bonds 288,960.40 378,960.50 378,960.50 367,477.90

364 Days Treasury Bills 186,857.57 189,098.18 222,642.15 520,495.46

182 Days Treasury Bills 82,906.22 84,561.42 160,808.50 193,030.04

Duty Drawback

Scheme 44.64 44.64 44.64 44.64

Tax Reserve Certificate 64.70 64.70 64.70 64.70

NSSF-Mabibo Hostel 8,236.70 8,236.70 8,236.70 8,236.70

TOTAL 2,376,889.27 2,838,384.06 3,027,810.11 3,330,894.93

25


Annex 9: Domestic Debt service (million Tshs)

Principal Rolled

Over Interest Serviced Total

Jul-10

28,364.59

2,360.91 30725.50302

Aug-10

33,527.38

15,847.78 49375.1657

Sep-10

102,222.43

13,454.37 115676.7923

Total

164,114.40

31,663.06

195,777.46 Source: Ministry of Finance and Economic Affairs

Documents

MINISTRY OF FINANCE AND ECONOMIC AFFAIRS QUARTERLY ... · the united republic of tanzania ministry of finance and economic affairs quarterly economic review and budget execution report