Government Expenditure to Combat Pandemic Situation

JAMES MATHEW MGAYA – Art in Tanzania internship

Other Africa countries have prioritized the pandemic and the accompanying lockdowns measures that have worsened the severe food insecurity problem, increasing the population of people living in extreme poverty. While Tanzania has opted for a different approach. Though Tanzania’s unconventional approach to COVID-19 may be slow in response ad seem to lack in direction, its uniqueness illustrates the need for government to form context-specific smart containment strategies and recovery plans. The Tanzania government’s expenditure was to maintain multiple competing priorities, so far the government did not ignore the pandemic by increase public health funding. Tanzania’s interest was to contain the transmission of the virus along all its borders and coordinate closely with its partners, maintain diplomatic relationships, ensure trade is not severely disrupted, and invest in formal small-holder farmers to produce for domestic economy.

How did it work?

Tanzania used its government expenditure to refocus on financial services which makes them among 14 African countries that did not introduce any social safety measures, such as cash transfers. Instead, the government focused on responding with some economic measures through the Bank of Tanzania with various policies to ease liquidity and safeguard the stability of the financial sector. The bank reduced the discount rate, lowered the minimum reserve requirements ratio, incentivised the restructuring of loans for severally affected borrowers, and relaxed limits on mobile money use.

Tanzanian government expenditure focused on increasing its capacity to maintain and manage the virus, while pursuing sustainable economic development. In other words, Tanzania can learn to adapt and live with the virus in a way that is not detrimental to the economy, but not overwhelming the health system. They fund health centres and witness the Covid-19 emergence facilities and also Government built special covid-19 health centres to combat it and increase public health funding to local health centres to implement mass testing, enforce social distancing, and sanitation measures.

Tanzanian government expenditure uses the Strategic Cities Project for Tanzania development objectives to facilitate the Additional Financing (AF) which enhances the development impact and sustainability of the investments financed by the original project by investing in equipment and operation, and maintenance capacity for existing infrastructure, and deepening local government capacity for urban management. These initiatives enable the government to maintain multiple competing priorities, managing the transmission rate, while ensuring food security creating and protecting jobs. 

Conclusion

The COVID-19 pandemic will have short-, medium-. and long-term effects on territorial development and sub-national government functioning and finance. One risk is that many governments respond to focus only on the short term. But the Tanzanian government use it’s expenditure to longer-term priorities must be included in the immediate response measures in order to boost the resilience of regional socio-economic systems. Much effort of Tanzanian government redirected to growth of economy during pandemic so as government expenditure was driven by strong public investment and export earnings. The government’s firm focus and commitment during this pandemic have been to avoid a complete halt of economic activities. 

Resources

The International Growth Centre – COVID-19 in Tanzania: Is business as usual response enough?

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