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| Minister for Finance and Planning, Dr. Philip Mpango. |
The government reiterated yesterday that the domestic national debt which stands close to 50trl/- is still manageable at 34.4 per cent against Gross Domestic Product (GDP), meaning that the country still has openings for borrowing from local and foreign lenders. International standards require that for a national debt to be sustainable, it should not be above 56 per cent against the GDP of a respective country.
Speaking at a news conference yesterday, the Minister for Finance and Planning, Dr Philip Mpango, assured the public that the national debt was manageable and well below the required international standards. The statement by Dr Mpango comes in the wake of revelations by the Controller and Auditor General (CAG), Prof Mussa Assad, who had raised an alarm over what he described as “ballooning of the national debt.”
If you look at the national debt against the GDP, it is at 34.4 per cent, which means that it is still 22 per cent low compared to required international standards,” Dr Mpango, a former senior economist at the World Bank, stated yesterday. On sovereign debt, Dr Mpango explained that the amount stood at 13.3 per cent against the GDP and yet the required international standard was at 20 per cent.
Sovereign debt is the amount of money that a country’s government has borrowed, typically issued as bonds denominated in a reserve currency. The clarification by Dr Mpango follows varying figures issued by government officials, including Prime Minister Kassim Majaliwa and the Permanent Secretary in the Ministry of Finance and Planning, Mr Dotto James.
Premier Majaliwa had pegged the debt at 55.9trl/- while the PS put it at 27.04trl/- but Dr Mpango clarified yesterday that the amount depended on the date and exchange rate of the local currency against foreign currencies. “The amount stated by the Prime Minister was the public debt as of December 2017. My figures were based on the national debt which excludes the private sector,” he explained.
The Finance and Planning Minister also outlined measures the government had taken in regard to irregularities revealed by the CAG for the financial year 2016/2017. Some of the key findings included over 11.05bn/- in excise taxes imposed on taxable fuels, a sharp increase in foreign medical bill from 28.6bn/- to 45.73bn/- during the period under review as well as 20.1bn/- spent on feasibility studies for non-performing projects.
Dr Mpango said the government had since instituted a number of measures, including taking disciplinary and legal actions. He said already, the government had withheld over 5bn/- from the mining companies who misused the tax holiday. “TRA is taking actions that include imposing fines on such institutions,” he said. According to the minister, the debt for the foreign medical bill had increased following the rising number of medical consultations but remarked: “The government is improving its health system tremendously.” He said Muhimbili National Hospital, Jakaya Kikwete Cardiac Institute (JKCI), Ocean Road Cancer Institute, Mbeya Referral Hospital, KCMC, Bugando and Benjamin Mkapa Hospitals had facilitated a drop in the number of referrals abroad. He admitted however that the country was facing a shortage of health professionals, adding that the government was working to ensure that the problem, especially at the BMH, was resolved immediately.
The Minister of State in the President’s Office (Regional Administration and Local Government), Mr Suleiman Jaffo, responding to CAG reports, described the documents as “key pillars” for the ministry’s performance. The minister said his office had been taking serious measures to work on recommendations made in all the reports and it had now connected all 185 councils with state electronic payment systems to improve revenue collections.
Daily News
Speaking at a news conference yesterday, the Minister for Finance and Planning, Dr Philip Mpango, assured the public that the national debt was manageable and well below the required international standards. The statement by Dr Mpango comes in the wake of revelations by the Controller and Auditor General (CAG), Prof Mussa Assad, who had raised an alarm over what he described as “ballooning of the national debt.”
If you look at the national debt against the GDP, it is at 34.4 per cent, which means that it is still 22 per cent low compared to required international standards,” Dr Mpango, a former senior economist at the World Bank, stated yesterday. On sovereign debt, Dr Mpango explained that the amount stood at 13.3 per cent against the GDP and yet the required international standard was at 20 per cent.
Sovereign debt is the amount of money that a country’s government has borrowed, typically issued as bonds denominated in a reserve currency. The clarification by Dr Mpango follows varying figures issued by government officials, including Prime Minister Kassim Majaliwa and the Permanent Secretary in the Ministry of Finance and Planning, Mr Dotto James.
Premier Majaliwa had pegged the debt at 55.9trl/- while the PS put it at 27.04trl/- but Dr Mpango clarified yesterday that the amount depended on the date and exchange rate of the local currency against foreign currencies. “The amount stated by the Prime Minister was the public debt as of December 2017. My figures were based on the national debt which excludes the private sector,” he explained.
The Finance and Planning Minister also outlined measures the government had taken in regard to irregularities revealed by the CAG for the financial year 2016/2017. Some of the key findings included over 11.05bn/- in excise taxes imposed on taxable fuels, a sharp increase in foreign medical bill from 28.6bn/- to 45.73bn/- during the period under review as well as 20.1bn/- spent on feasibility studies for non-performing projects.
Dr Mpango said the government had since instituted a number of measures, including taking disciplinary and legal actions. He said already, the government had withheld over 5bn/- from the mining companies who misused the tax holiday. “TRA is taking actions that include imposing fines on such institutions,” he said. According to the minister, the debt for the foreign medical bill had increased following the rising number of medical consultations but remarked: “The government is improving its health system tremendously.” He said Muhimbili National Hospital, Jakaya Kikwete Cardiac Institute (JKCI), Ocean Road Cancer Institute, Mbeya Referral Hospital, KCMC, Bugando and Benjamin Mkapa Hospitals had facilitated a drop in the number of referrals abroad. He admitted however that the country was facing a shortage of health professionals, adding that the government was working to ensure that the problem, especially at the BMH, was resolved immediately.
The Minister of State in the President’s Office (Regional Administration and Local Government), Mr Suleiman Jaffo, responding to CAG reports, described the documents as “key pillars” for the ministry’s performance. The minister said his office had been taking serious measures to work on recommendations made in all the reports and it had now connected all 185 councils with state electronic payment systems to improve revenue collections.
Daily News
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