- Published on Friday, 15 June 2012 02:30
- Written by MASATO MASATO in Dodoma
- Hits: 1017
FINANCE Minister William Mgimwa on Thursday unveiled the 2012/2013 national budget that targets an economic growth of 6.8 per cent, detailing swift measures to ease the economic hardships that afflict the people.
Dr Mgimwa said the 15trn/- budget seeks to tame rising inflation, food insecurity and unemployment, with specific emphasis on power generation, infrastructure development, strengthened revenue collections and tight control on public expenditure.
The government announced ambitious plans to partner with the private sector to invest heavily in rice and sugarcane farming in the country's major valleys --Wami, Ruvu, Kilombero and Malagarasi -- as strategic measures to curb food shortages.
"The government plans to guarantee food security through increased production of food crops," Dr Mgimwa said of the single digit inflation targeting budget, hinting that the government will adhere to the pillars of multibillion Kilimo Kwanza initiative.
The agriculture, fisheries and livestock sector has been allocated 262bn/- in the budget. The minister said that reliable availability of electricity was among the top priorities of the budget, with about 500bn/- allocated to power generation, transmission and distribution.
Construction of the gas pipeline from Mtwara to Dar es Salaam will be accomplished using a 1,225 million US dollar (about 2trn/-) loan from the Exim Bank of China.The budget has transport on its top priorities, with 1.4trn/- allocated to strengthen the central railway line by renovating the train engines and wagons. The allocation will also target priority roads with the potential of opening up economic activities.
The government, determined to address unemployment, declared strategies to widen access to financial services, with the view of supporting youths in their quest for self employment.Establishment of an Agriculture Bank and increased capital in the Tanzania Investment Bank, Tanzania Women Bank, Tanzania Postal Bank and Twiga Bancorp are the strategies that envisage availing the youth with credit facilities.
The government also expects to create jobs through construction and upgrading of roads, electricity, agriculture and communication infrastructure networks while the private sector was encouraged to use the private sector development window at the African Development Bank to create more jobs.
During the 2012/2013 fiscal year, the government plans to employ 71,756 Tanzanians in education, health, agriculture and other sectors.The budget, whose consumption expenditure accounts for over 70 per cent, leaving only 4.5trn/- for development, is 30 per cent dependent on foreign funding.
Local sources of funding that include tax revenues, non-tax revenues, local government authorities collections and domestic borrowing will generate 10.7trn/- out of the expected total revenues of 15.12trn/-.
Meanwhile, the government has set aside 128bn/- in the 2012/2013 national budget to promote industrial production of goods from locally produced raw materials and improve business environment to stimulate economic growth.The budget allocation targets industries that add value to minerals, large cement factories and electronics as well as information and communication technology.
Unveiling the budget estimates here last evening, the Finance Minister, Dr William Mgimwa, announced plans to allocate specific areas for investments in urban and rural areas as well as strengthening small enterprises in the country.The minister said the government will strengthen financial services, the credit and cooperative societies, village community banks and community banks, in particular, to avail people with access to credits for businesses and productive activities.
The budget estimates through which the government seeks to increase credit to the private sector to 20 per cent of gross domestic product by June 2013, show a 2.6bn/- allocation to boost the capital of Tanzania Women's Bank, Economic Empowerment Fund and Small Enterprises Loan Facility.
"The Ministry of Finance is promoting microfinance institutions to effectively avail credits to the needy productive sectors," Dr Mgimwa told the august House in a speech he read in two and a half hours.The new budget also seeks to improve the quality of education at all levels, particularly in research, vocational training, health, science and special skills on mining, gas, uranium, iron and oil, with 84bn/- set aside for renovation and acquiring facilities for the laboratories.
Dr Mgimwa enumerated some of the key objectives of his first budget since he was appointed to Treasury as increased access to financial services, increased domestic revenue to 18 per cent, up from 16.9 per cent of GDP in this ending financial year as well as maintain stable and market determined exchange rate.