The 2012/13 government budget will address critical challenges facing the country’s economy with the object to curb inflation to a single digit, improve infrastructure and access to social and financial services, Finance Minister Dr William Mgimwa said yesterday.
According to Dr Mgimwa, the 15trn/- government budget will ensure the country’s Gross Domestic Product (GDP) grows at 6.8 per cent from the current 6.4 per cent.
Dr Mgimwa said the budget estimates had taken on board recommendations from various stakeholders, including legislators and ordinary citizens, most of whom were concerned about high commodity prices and the shilling's depreciation.
He said the government would continue with efforts to control inflation, maintain stable and market-determined exchange rates, and beef up foreign reserves to cover between four and five months of imports.
“We intend to increase the opportunities for economic growth, food availability, cut inflation, employment creation for youths and strengthen revenue collection and management of expenditure”, said the minister.
With regard to infrastructure development, he said priority had been put on three major areas, namely electricity, transport, clean and safe water and information and communication technology.
He said the government planned to spend 498.9bn/- to increase power generation, transmission and distribution and construct a natural gas pipeline from Mtwara to Dar es Salaam using a USD 1,225.3 million loan from Exim Bank of China.
On transport, the minister said the target was to strengthen the central railway line, which would involve the renovation of train engines and wagons, improve roads which are likely to open up economic opportunities, rehabilitate airports and develop ports on Lake Tanganyika at a total cost of 1,382.9bn/-.
Dr Mgimwa said 568.8bn/- would be used to increase the availability of clean and safe water in urban and rural areas, adding that 4bn/- would be used to strengthen communications through Information and Communication Technology (ICT).
Priority, according to the minister, would be accorded to the development of agriculture in collaboration with the private sector. To that end, investments would be made in rice and sugarcane farming in major valleys of Wami, Ruvu, Kilombero and Malagarasi rivers and strengthen implementation of the ‘Kilimo Kwanza’ initiative by ensuring adherence to all its pillars. He said 192.2bn/- was allocated for the purpose.
He said in the 2012/13 budget 128bn/- has been allocated to industrial development with the objective to develop industries which utilise locally produced raw materials, industries that add value to minerals, large cement factories, and ICT.
It would also improve the business environment, allocate specific areas for investment in urban and rural areas and promote partnerships between the public and private sectors.
On human resources and social services development, he said the government planned to use 84bn/- to improve the quality of education at all levels.
“The government will continue to strengthen financial services, particularly the savings and credit schemes such as savings and credit cooperative societies (SACCOS), village community banks (VICOBA) and community banks so as to enable the people access credits for business and production activities,” Dr Mgimwa said.
He said that 2.6bn/- has been allocated to enhance the capital of Tanzania Women’s Bank, Small Enterprises Loan Facility (SELF) and the Economic Empowerment Fund.
He promised to increase credit to the private sector to 20 per cent of the GDP by the end of June 2013, strengthen public-private partnership (PPP) with a view to widening opportunities for implementation of development projects, and improve the business environment for small and medium enterprises (SMEs).
Dr Mgimwa said the government would continue to borrow from the domestic financial market to finance development projects and pay for maturing Treasury bills and bonds.