It could be a little too early to predict the changes to be made in the incoming 2019/20 financial budget for a government but Tanzania is readying to make the necessary changes to its next fiscal year budget, preparing for a better economic environment and a promising future for the nation and its citizens.
Tanzania’s Minister for Finance and Economic Planning Dr Phillip Mpango unveiled the latest budget in June this year, which was President John Magufuli’s third financial year budget. Tanzania’s 2018/19 fiscal year budget amounted to $14 billion recording a significant 2.4 per cent in spending.
In comparison to the other FY budgets of the East African Community (EAC) nations, Kenya’s budget surpassed that of Rwanda’s at $2.8 billion and Uganda’s at $8.5 billion, and Tanzania’s combined. However, it was noticeable that all the countries increased their spending by a measurable percentage.
The Tanzania Development Vision 2025, which includes National Five Years Development Plan 2016/17 – 2020/21 and the CCM Manifesto 2015 – 2020 dictated the change in the government’s expenditure, aiming at building an industrial economy. Several priorities highlighted in the previous budget allocation seem to have changed in the new plan.
Under the 2018/19 Government Revenue and Expenditure, top priorities were agriculture, industries, social services, and infrastructure. Other priorities at the bottom of the pecking order included tourism, communication, and land acquisition. The government devised a stratagem on how to increase revenue through taxes.
At the pinnacle, agriculture is crucial as it is the country’s economic mainstay, a source of livelihood to most of the population and main export earner. With industries, as the country pushes to become a middle-income country by 2025, industrialization is crucial in transforming the economy.
In the new strategy, prioritized areas are hydropower projects, standard gauge and railway infrastructure development, and aviation industry. Other infrastructure developments include road upgrades, bridges and ports construction. The latter is pivotal to avoid delays of consignments and promote trade beyond its borders. Logistics companies such as Maersk are showing interest in expanding their operations in East Africa.
Agriculture is given a special consideration, according to Minister Mpango although it is not listed among the top five crucial areas to be given keen attention. He assured the Parliament the sector is still paramount in the national economy as it contributes handsomely to the national GDP.
The necessary changes geared towards a better and sustainable economy are upheld by good governance and justice. Despite President Magufuli emphasizing on foreign investments, the government has been slow to put in place the necessary business regulations to catalyse FDIs. Rather, it has in the meanwhile, urged local investment. However, Minister Mpango said his government is determined to bring in investments to sectors that are a high priority on its development agenda, such as roads and industrial parks.