The government should properly work on its laws and policies after approving the 2012/2013 budget to avoid

unwarranted deficit caused by misbehavior of some leaders, some university lecturers have urged.

Speaking to The Guardian the Economic experts from The University of Dar es Salaam (UDSM) said once the budget is approved by the parliament it becomes a law.

Dr Haji Semboja Hatibu, an economist with the University of Dar es Saaam said that government institutions like the National Assembly, the President’s Office, the Prime Minister’s Office and other ministries should be constrained to respect their obligations under the Finance Act.

“Last year Speaker Anne Makinda sought to obtain assent from President Jakaya Kikwete to raise allowances for MPs from Sh 70,000 per day to Sh200,000 per day which was contrary to the spirit of the law of approving the budget,” he affirmed.

If MPs sought to have such rise allowances they should have requested its being tabled as part of the tabled it as part of budget estimates and is discussed accordingly, and if approved causes no deficits beyond what was set out in the budget, he said.

Despite that the president did not approve the request it still depicts the poor standards that were observed to put up the proposal energetically and with insistence that it is approved, he said.

“This is a sign of fiscal indiscipline among MPs, as they did not intend to respect the legislation on the country’s finances that they had only recently approved,” he pointed out.

Dr Lenny Kasoga, another economist at UDSM said that in order to have a strong economy the government needs to tackle wild price fluctuations.

Inflation must be curbed and production of goods stabilized so that domestic output of goods and services can be strengthened. The government can make the country’s economy independent if it utilizes its resources properly, improve technology and avoid loans from local and foreign commercial.

Dr Kasoga stressed that our leaders lack confidence in building a strong self-reliant economy and are prone to seeking assistance, as they have no substitute plan themselves.

Commenting on rising dollarisation in the Tanzanian economy Dr Semboja said the government can accumulate millions of US dollars once it owns natural resources.

He said there is no need for the government to prohibit the use of the dollar because it’s a free market, and instead it needs to make use of this opportunity to enhance its dollar reserves when it has greater control of foreign exchange earnings from natural resources.

“It’s not only Tanzania that uses the US dollar in a routine manner as well as local currencies. Other countries doing the same have specific policies and supervision regulations, but using a foreign currency routinely is normal in a free trade environment,” said Dr Semboja.

The researcher noted that the government has no policy stance on the parameters of using the local currency as it also takes taxes from a variety of sources in foreign currency, especially custom duties.

It is not going to be a major policy matter if the government owns the national wealth, he said. The government loses lots of money to foreigners who own national wealth including goldmines and make millions of dollars in earnings.

“The shilling can properly compete in the market when the government enables people to engage in different activities permitting them to make dollars through exports,” the lecturer underlined. Commenting on the topic Dr Kasoga said: “It is a shame that with so much gold being mined in our country our currency is weak. It is political weakness because otherwise our currency would be strong but we only claim three percent loyalty and 97 percent of the gold strengthens foreign economies.”

He stated that the shilling cannot become a medium of international exchange because of a weak economy and the small size of production capacity and poor technology base that supports the shilling.

“The only option is for EAC to have a common currency, in which case the governments must sit down and establish the regional equivalent of a euro,” said Dr Kasoga.

Dr Kasoga asserted that the use of the dollar is influenced by the weakness of policy makers and mismanagent of the economy.

“As you're well aware, the value of the Tanzanian currency since devaluation in the early 1980s has been on a downward trend. In the 1970s the exchange rate was Tshs 7 to the dollar and today it ranges between Tshs 1560/1580 to the dollar,” he said.

“However, if you try to purchase goods and services in a village or small township with the dollar, villagers or residents will not accept it, because they won’t be able to utilize it freely. They would have to go to town to get it changes to something they know how to return its change,” the lecturer added.