Tanzania Daily News (Dar es Salaam)

29 April 2014

Tanzania: All Set for Crucial Govt Budget Session

THE marathon budget session of the National Assembly kicks off in Dodoma on May 6, where Members of Parliament (MPs) are going to deliberate on the government's fiscal plans and expenditure for the year 2014/2015.

The budget session is perhaps the most important one in the country's annual political calendar. This is the period when the people expect to witness the government, through their representatives, being made accountable for the conduct of its business during the financial year.

In 2013/2014 the government projected to raise about 18.24tri/- from domestic and foreign sources, where 11.15tri/- was expected to come from tax and non-tax revenue.

Experts say the projected amount is equivalent to 20.2 per cent of the country's gross domestic product (GDP). It is now time to assess the fiscal achievements during the year and look for the way forward.

But the general sentiment is that more needs to be done in collection of the government's revenue including casting the taxman's net wider.

The government had been forced to resort to borrowing abroad and locally to finance the budget deficit. In the 2013/2014 the plan was to borrow about 3tri/- from such sources.

Borrowing is apparently necessary for the government to execute various capital intensive projects such as implementation of infrastructure development programmes like construction of roads and rail networks.

However, the government is duty bound to see to it that borrowing is done sustainably and spending must at anytime be done prudently.

The MPs, if they are to be worth their salt, must follow the money allocated to all government ministries, departments and agencies.

The budget session comes at the time when the economic growth is impressive. It grew at seven per cent in 2013, and is projected to reach 7.2 per cent in 2014, while inflation is around 6.0 per cent. Such encouraging macro-economic indicators must be maintained or improved further in future.

This is because to conquer poverty Tanzania needs to attain consistent over 10 per cent growth levels for up to 10 years. The National Assembly will be meeting to discuss the country's performance in regard to the millennium development goals (MDGs).

There are various areas including coverage of primary and secondary education where the country performed well, but more efforts are needed on the reduction of poverty, childhood deaths and maternal mortality levels.

The number of deaths of infants and children under the age of five as well as maternal mortality is still unacceptably high. The House should encourage the government to direct more material and human resources now and during the post-MDG era.

Another issue that must be properly addressed during the budget session is proper utilisation of the recently discovered on-shore and off-shore natural gas fields.

Estimates put the resources at around 46 trillion cubic feet (tcf) and if all goes well, the figure is projected to reach 200 tcf within the next two years.

This puts Tanzania prominently among the ranks of major natural gas producers in the world. But plans must be there to avoid falling into the trap of resource curse. It should be stressed that such resources are not forever. They are finite and one day all the wells are going to be exhausted.

It is therefore important for this generation to start working out plans for the nation's grandchildren and their children to inherit something drawn from the natural gas wealth. In so doing, the grand children are going to be proud of the present generation.

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