Tanzania's parliament has endorsed a 1.9 billion US dollar budget for the 2001/02 fiscal year, amid mixed feelings in political and economic circles on government's ability to meet its poverty elimination targets.
During a week-long debate that ended Friday night, several legislators expressed reservations about the budget, saying they believed it inadequate to speed up growth in the agricultural and manufacturing sectors.
Opposition MPs rejected it, claiming that "it looked good on paper, but ignored the common man on the street by failing to address problems in the agricultural sector."
"This budget is heavily dependent on external donors and focussed on consumption, rather than development projects," opposition leader in parliament Aman Kabourou said.
Many other MPs observed that the agricultural sector, which grew at 3.4 percent in 2000, needed a big shove to enable it to grow beyond 10 percent annually for Tanzania to meet its target of eliminating poverty within the next two decades.
Agriculture accounts for a half of Tanzania's gross domestic productand about 70 percent of exports, while employing over 80 percent of the workforce.
Government sources here put Tanzania's per capita GDP at about 270 dollars.
On June 14, Finance Minister Basil Mramba announced several measures he will use to finance his 2001/02 budget, which is up by some 400 million dollars on the current fiscal year's budget of 1.5 billion dollars.
Mramba said 1.5 billion dollars would be spent on existing votes and 400 million dollars on development projects.
He put domestic revenue projections at about 1.1 billion dollars, of which 999.8 million dollars would be raised through taxation and 109.9 million dollars on non-tax sources such as licences, fees and fines.
The 721.82 million dollar deficit would be financed, the minister said, by external loans, grants and aid, including those to be availed under the World Bank and International Monetary Fund-supported enhanced Highly Indebted Poor Countries (HIPC) initiative.
Tanzania is expected to qualify fully for the HIPC arrangements later this year.
Mramba also said that 99.4 million dollars would be raised from reserves and proceeds from privatisation of public-owned institutions during the 2001/02 fiscal year.
He announced several tax changes, including the abolition of Value Added Tax (VAT) on computers, printers and other accessories to encourage use and investment in information technology.
He also abolished VAT on hospital supplies and drugs for treatment of malaria, TB and HIV/AIDS, locally produced yarn, ground transport by tour operators and milk packaging materials.
In a move to protect the local diary industry, Mramba banned importation of powdered milk, while he imposed 25 percent suspended duty on all imported milk, except for infant formula.
Mramba pledged to maintain strict fiscal discipline in government expenditure to curb inflation projected at 5.0 percent by end of June 2001 and targeted at 4.0 percent by June 2002.
Analysts say the 2002 target does not appear to be feasible due to escalating fuel prices and the depreciation of the Tanzanian shilling. |
