Assessment of Public Capital Expenditure Financing in Zanzibar

Abstract

This study conducted an assessment of public capital expenditure financing in Zanzibar for the period from 1990/91 to 2019/20. Descriptive analysis was used to investigate the type of public capital expenditure undertakings by the RoGZ and major sources of capital expenditure financing while a chi-square test was used to assess performance of public capital expenditure financing in Zanzibar. Findings demonstrated that, development strategies (ZPRP and ZSGRP I-III) put into focus public capital expenditure financing in Zanzibar. It also revealed that, foreign fund and domestic revenue are the major sources of public capital expenditure financing in Zanzibar. The study concludes that Domestic Source, mostly represented by tax revenue in Zanzibar has significantly improved. However, donor funding still heavily dominated public capital expenditure financing in term of estimates. It is further, concluded that, performance of public capital expenditure financing in term of expected values and observed values was not good. Based on the study results, it is recommended that, there is a need for the RGoZ to strengthen its effort in the tax collection and ensure larger share of the tax collected is allocated for public capital expenditure financing in order to reduce over dependency on foreign source for financing capital expenditure in Zanzibar.

Keywords: Public Capital Expenditure, Domestic revenue, Foreign revenue, Chi-square

DOI: 10.7176/JESD/12-2-06

Publication date: January 31^st 2021