EAST AFRICA UNVEILS NATIONAL BUDGETS "Credit News 24"
It is budget day for the East African region as partner states are set to present their national budget estimates simultaneously today. And, for Tanzania, all roads lead to Dodoma where the government is penciling to table the national budget estimates for the 2017/18 financial year.
The government is expected to increase spending to 32.945tri/- from the current 29.5tri/-, to finance implementation of flagship infrastructural projects aimed at enabling Tanzania to make optimal use of its strategic position as a transport hub in the region.
The 2017/18 budget is aimed at financing the second year of the ambitious Five- Year Development Plan II (2016/17 - 2020/21) which is geared towards heavy investments in infrastructure to transform the nation from an agricultural economy to an industry based economy.
Key development projects with significant multiplier effects to the economy as outlined in the plan include construction of the standard gauge railway (SGR) to link the Dar es Salaam Port with Mwanza on Lake Victoria and Kigoma on Lake Tanganyika, as well as neighbouring Rwanda and Burundi.
The government is funding construction of the first phase of the line, about 207km from Dar es Salaam to Morogoro which will be constructed by a Turkish Company Yapı Merkezi and Portugal’s Mota-Engil under a turnkey contract at a cost of 1.2bn US dollars.The government has also lined Mchuchuma Coal Mining and Liganga Iron Ore Mining, a 3bn US dollar project which includes construction of a 600MW coal-fired power station and an iron plant expected to make Tanzania the third largest African producer of iron ore and generate 32,000 jobs.
Other flagship projects include revamping of the national carrier, Air Tanzania Company Limited, to boost tourism and air transport sectors. The government purchased two bombardier aircrafts for the national carrier last year and has made initial payment for four more aircrafts as part of plans to enable it recapture its lost glory and take back its market share from rivals.
The plans also involve construction of a Liquefied Natural Gas (LNG) plant in Lindi Region, establishment of Special Economic Zones (SEZ) in Tanga, Bagamoyo, Kigoma, Ruvuma and Mtwara; establishment of Kurasini Logistic Centre; and procurement of new and rehabilitation of existing ships for Victoria, Tanganyika, and Nyasa lakes.
Members of Parliament interviewed by this paper expressed optimism that the forthcoming budget will help the government accomplish projects outlined in the Five Year Development Plan, which is aimed at transforming the nation from agricultural led economy to a semi-industrial economy by 2025.
Prof Anna Tibaijuka (Muleba South, CCM) expressed positivity that the 2017/2018 budget will be able to accomplish development projects that will speed up transformation from agricultural economy to semi-industrial economy. “I have positive forward looking attitude. President Magufuli is a man of action, a man of deeds.
“He wants to accomplish projects outlined in the development plan. He is focused in infrastructure development to provide the base for expanding the economy. So, I am optimistic the budget will live up to expectations,” she said.
Mzee George Mkuchika, (Newala, CCM) said he was also positive that the budget will meet the targets of boosting economic growth and development through heavy public investment in infrastructure development.
“We can’t build an industrial economy without developing infrastructure. We must have reliable roads and railway network to transport raw materials to feed the industries. So, I hope it will target infrastructure development,” he said.
The Newala MP said he also expects that the budget will focus on improving health and education and expanding access to water and electricity in rural areas. Dr Raphael Chegeni (Busega, CCM) said he was also hopeful that the budget will help the nation accomplish projects outlined in the development plan, but said it will be vital for the government to focus on more expansion of tax base and greater tax simplification to boost revenue.
“We need a strategy to expand the tax base, to include activities in the informal sector and make it simple to pay to enhance compliance,” he said, adding that when taxes become too many and complex, compliance goes down.
Dr Chegeni also said the government needs to control the national debt to sustainable levels as it keeps on rising when the nation seeks foreign funds for infrastructure development.
According to him, little remains in the budget for development activities as the wage bill and servicing of the national debt eat up a big chunk of government revenue. Dr Chegeni added that the government needs to address liquidity squeeze challenges to stimulate the micro-economy.
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