How Tanzania spent Sh20 trillion in 2 years on projects

Dar es Salaam. President Samia Suluhu Hassan has invested nearly Sh20 trillion in the implementation of development projects in the infrastructure and energy sectors during her two-year reign, it has been learnt.

Reports say that Sh12 trillion was directed for projects executed by the ministry of Works and Transport while about Sh8 trillion was pumped to the ministry of Energy.

A significant portion of the money given to the ministry of Energy was used to carry out the Julius Nyerere Hydropower Project (JNHPP), while the majority of the funds given to the ministry of Works and Transport were used to carry out the Standard Gauge Railway (SGR) project.

The money came from different sources, including budgetary allocations, aids, and loans from different financial institutions, both domestic and foreign.

Speaking recently to The Citizen, the assistant commissioner from the policy analysis department in the ministry of Finance and Planning (micro), Mr Mbayani Saruni, said the amount could be more than that.

“The ministry of Work and Transport is in the lead due to the ongoing implementation of the SGR project. In particular, the ministry of Energy has come second due to the execution of the JNHPP,” he said.

“I don’t know how that was calculated, but the situation can be seen like that,” he added.

The Treasury, on behalf of the central government, stood third as it spent another reasonable amount for debt servicing and the payment of salaries to public servants. Spending by the ministry of Energy will definitely increase because preparations for the implementation of the Liquefied Natural Gas (LNG) project worth over $40 billion are underway.

Jointly with Ugandan counterparts, the country is also expected to implement the East African Crude Oil Pipeline Project (EACOP), worth $3.5 billion.

The University of Dar es Salaam (UDSM) economist, Prof Humphrey Moshi, said Tanzania will start reaping the benefits of these investments in the next few years.

He commended President Hassan for walking the talk in the implementation of projects started by her predecessor, President John Magufuli, who suddenly died in office on March 17, 2021.

“This investment will lay an economic foundation in many areas. Reducing costs of product production and stimulating Foreign Domestic Investment (FDI) are among the benefits the country should expect to reap,” said the UDSM don from the department of economics.

“The investment will create more jobs, address the challenge of youth unemployment in the country, and reduce the rate of youth migration,” he added.

Furthermore, he said the government’s investment will promote irrigation agriculture, especially in addressing the challenges of wheat and edible oil shortages.

Cooking Energy

The Permanent Secretary in the ministry of Energy, Mr Felchesmi Mramba, said the government is collaborating with stakeholders in preparing the structure of a special fund alongside a 10-year vision and strategy on clean cooking energy for 2023–2033.

The move aimed to implement the country’s ambition to reduce the use of firewood and fossil energy for domestic and industrial purposes.

Statistics show that 63.5 percent of households in Tanzania are using firewood as their main source of cooking energy, followed by 26.2 percent using charcoal, 5.1 percent Liquefied Petroleum Gas (LPG), three percent using electricity, and 2.2 percent using other sources.

“We are very excited to see a project that will benefit the majority of women. Even our recent tour to encourage the women in rural areas to start using gas instead of firewood and charcoal was part of these efforts,” said Ms Regina Kabwogi, the director of Training and Research at the Tanzania Women in Energy Network (TaWoE).

Power

The Parliamentary Committee on Energy and Minerals says Sh4.42 trillion is needed to address the frequent challenge of power outages. In February of this year, 26 solid grid agreements worth Sh1.9 trillion were signed as steps to empower the organisation.

Fuel crisis

In order to address the challenge of the global fuel crisis brought about by the impacts of the ongoing war between Russia and Ukraine, President Hassan’s administration affected the provision of a Sh100 billion subsidy that will reduce prices for final consumers.

“The country should also invest and convert their vehicles to start using Compressed Natural Gas (CNG), which is also recommended in addressing the challenge of environmental pollution,” said Raphael Mgaya, the Tanzania Association of Oil Marketing Companies (TAOMAC) executive director.