Reforming allowances

Last fiscal year (2008/9) the Government of Tanzania budgeted an impressive Tshs 506 billion ($390 million) for allowances. This amount is equivalent to the annual (maximum) basic salary for 109,000 teachers, or over two thirds of all teachers.
Despite consolidations in the wage bill in 2001/2 and in 2007/8, allowances have proved to be remarkably persistent. In 2009/10 the amount allocated to allowances was equal to 59% of the total wage bill (pensionable and non-pensionable basic salaries plus
pensions). Between 2001/2 and 2006/7 the real amount spent on allowances increased more than 3-fold;  relative to last fiscal year, and despite the economic crisis, allowances in this year’s budget increased by 13%.

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