Tanzania Daily News (Dar es Salaam)

Tanzania: Experts Point to Inflation Control As Growth Factor

ECONOMISTS said on Tuesday the expected growth of 6.8 per cent might not be attained should the coming fiscal budget failed to address variables which are fuel inflation.

Their concern ballooned given the fact that out of 2012/13 budget allocation of 15.05tr/-only 30 per cent, merely 5tr/-, will be set aside for development activities and half of it set aside to pay debt, which they tame as 'a token.' On top of that, "it will need extra efforts to raise the 15tr/- in a country whose revenue collection is just 16 per cent of GDP amidst a potential of 21per cent," Mzumbe University's Dar es Salaam School, Dr Honest Ngowi said.

Dr Ngowi, who is a senior lecturer and consultant, said to arrive at the GDP growth desire of 6.8 per cent depends on how much the budget will address structural constraints to reduce and increase productivity.

"It depends on how much of the infrastructure budget will bring new quantity and quality of electricity, transport infrastructure, irrigation water for food production and other structural issues responsible for inflation in Tanzania," the economist said. University of Dar es Salaam Prof Humphrey Moshi also said the economy growth would be attained if the inflation would be attained by increasing food production using irrigation scheme.

"The budget has to address increasing food productivity using irrigation," Prof Moshi said "if food production is continue to depend on rains then attaining the growth will end up in vain." He said at the moment rainfed agriculture is not reliable due to global warming that changes the climate pattern world over.

"If productive agriculture using irrigation is not addressed, this budget will not be pro-poor," the senior economist said. However, he said if power stabilised, like in the current past, it would compensate some losses the GDP account experienced in previous years to drive home somewhat the projected growth.

Another senior economist, Dr Elisante Ole Gabriel said, the 30per cent fund set aside for development though is not enough, but it depends heavily on the important variables which have been set as priorities. "the priorities seem okay, but we have to spend prudently on whatever has been set aside... after all budget figure is one thing and availability of the fund is another thing altogether," Dr Ole Gabriel, a former Mzumbe University lecturer, said.

Dr Ole Gabriel said he saw no problem for the government to pay its debt as that also stimulates other sector to function at full potential hence rekindle the economy growth at end of the day.

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