Government unveils 7.2trn/- budget plan
SEBASTIAN MRINDOKO
Dar es Salaam
THE government plans to spend more than 7.2trn/- in its 2008/09 budget proposals, with agriculture, education, health and roads getting the lions share of the funding.
Unveiling the governments 2008/09 budget plan before the Parliamentary Finance and Economy Committee in Dar es Salaam yesterday, the Minister for Finance and Economic Affairs, Mustafa Mkulo, announced that donor dependency will be reduced from 41 per cent in the previous fiscal year to just 34 per cent.
Mkulo said the reduction of dependency on foreign donors for budget support would be achieved by ensuring the governments spending priorities are effectively met by internal revenue collections.
He said the governments spending in 2008/09 will reach a staggering 7,216.1bn/- compared to 6,066.8bn/- spent in the 2007/08 budget.
The minister noted that agriculture and infrastructure, particularly construction of new roads, have been given top priority by the government in its new development plans due to their central role in economic development.
We have increased spending in agriculture from 379bn/- in 2007/08 to 438.1bn/- in 2008/09, while the budget for infrastructure development has also gone up from 777.2bn/- to 971.9bn/-, he said.
In farming, Mkulo explained that there would be particularly more attention on improving agricultural production to curb rising inflation caused by food shortages.
He noted that food prices have been rising because the main grain producers in the world market are shifting to the use of food crops for production of bio-fuels.
Mkulo said Tanzania was comparatively better off in food security than some of its neighbours, who have already started to import huge consignments of food to offset deficiencies.
On infrastructure development, the minister said the government plans to build new tarmac roads using its own financial resources where possible so as to open up more geographically isolated regions in Tanzania.
The successes attained in social, health, education and water sectors in previous budgets would be sustained in this years government spending plan to improve the living conditions of the people, he said.
Mkulo said the government has given special emphasis on sectors dealing with HIV/AIDS, the environment and fight against corruption to improve public accountability.
He said budget allocation in education will increase from 1,086.0bn/- to 1,220.3bn/- during 2008/09, while health will also get a boost from 589.9bn/- to 784.5bn/-.
The minister singled out uncertainty of donor aid flow and availability of loans as one of the major challenges of the budget plan, thus the need to control government spending.
However, Mkulo did not explain whether or not the government would implement any of the recommendations from the Bomani mining sector review committee for tax reforms in the key sector in this years budget estimates.
Reacting to the governments 2008/09 budget plan, the Leader of the Official Opposition in the National Assembly, Hamad Rashid Mohamed, told THISDAY that he welcomed the reduction in donor dependency but urged the government to explain how it will fill the budget gap.
We are afraid that the stated decrease in budget dependency from donors will somehow be shifted to the people ... That is why the minister should clearly explain its sources of revenue, he said.
Hamad Rashid, who is also the shadow minister for finance, noted that the governments budget proposals have for years lacked consistency with statistics, varying each year, thus indicating a lack of seriousness on some government officials.
He said there was a need for government intervention to cushion Tanzanians from the effects of rising food and fuel prices.
The shadow finance minister said despite the increase in the budget allocation to agriculture, more government spending was needed in the key sector often described as the backbone of the countrys economy.
The proposed budget for agriculture has not focused on meeting the food demand in the country, exportation and industries. The government should give more emphasis on food production, including further increasing its budget allocation to agriculture, he said.