Creating Sustainable Fiscal Space for Infrastructure: The Case of Tanzania

By Teresa Ter-Minassian, Richard Hughes, Alejandro Hajdenberg

November 1, 2008

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Teresa Ter-Minassian, Richard Hughes, and Alejandro Hajdenberg. Creating Sustainable Fiscal Space for Infrastructure: The Case of Tanzania, (USA: International Monetary Fund, 2008) accessed September 20, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

A common dilemma facing governments around the world is how to meet the sizeable fiscal costs of providing and maintaining infrastructure networks. Over the past decade, developed and developing countries have looked to fiscal rules, budgetary reforms, tax policy and administration measures, public-private partnerships and other innovative financial instruments to raise additional finance for infrastructure investment. This paper looks at the range of options for raising the financing to meet Tanzania's infrastructure needs. It begins with a brief survey of the evidence on the relationship between infrastructure, public investment, and economic growth, and then goes on to consider the case for additional infrastructure investment in Tanzania. The second part of the paper looks at five broad options for mobilizing additional resources to meet Tanzania's infrastructure needs: (i) direct private investment and PPPs, (ii) expenditure reprioritization and efficiency, (iii) domestic revenue mobilization, (iv) external grants and concessional financing, and (v) sovereign borrowing on domestic or international credit markets. The paper concludes with some general recommendations on what combination of the above approaches might be suitable for Tanzania.

Subject: Expenditure, Infrastructure, Public debt, Public investment and public-private partnerships (PPP), Public investment spending

Keywords: Country, Government, Private sector, Proceeds, Tanzania, WP

Publication Details

Pages:

41
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2008/256
Stock No:

WPIEA2008256
ISBN:

9781451871142
ISSN:

1018-5941

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