This archive report was first published on 13 June 2020.
On June 11, Tanzania's Finance minister, Philip Mpango, presented the country's most optimistic 2020/2021 budget of Tsh34.88 trillion ($15.09 billion) in the region, predicting a quick economic recovery, amid hope of fruitful discussions with external creditors.
The country recently declared itself free from Covid-19, with President John Magufuli attributing the elimination of the disease to prayers to God.
According to the finance minister, real GDP growth is now projected to slow down to 5.5 per cent in 2020, from the previous month's estimate of four per cent, but lower than an earlier projection of 6.9 per cent.
Dr Mpango attributed the decline to heavy rains that destroyed transport infrastructure across the country and the impact of Covid-19 on trading partners around the world.
Despite the challenges, the government has decided not to reduce financing for ongoing development projects pegged at Tsh12.78 trillion ($5.53 billion), about 27 per cent of the total Tsh34.88 trillion ($15.09 billion) budget for 2020/2021.
However, the World Bank has predicted that Tanzania's economic growth would drop sharply to 2.5 per cent in 2020 due to the effects of the pandemic.
Dr Mpango said the budget recognised emerging opportunities from the pandemic, including falling world oil prices, rising gold prices, and a growing market for locally produced health products to combat Covid-19.
More resources will be allocated to enable medical and virology research related to the pandemic, as the government negotiates with bilateral creditors and international lending institutions to provide financing aimed at helping deal with the pandemic effects.
