What Mkulo will tackle in winding-up presentation

Sunday, 19 June 2011

Finance and Economic Affairs Minister Mustafa Mkulo By The Citizen Reporters Dar and Dodoma. Finance and Economic Affairs minister Mustafa Mkulo faces the daunting task of clarifying on at least seven major issues when he responds to MPs’ views on the 2011/12 Budget.Mr Mkulo, who tabled the Sh13.5 trillion Budget on June 8, is tomorrow expected to wind up debate on the proposals. Many MPs want a clear explanation of how the government plans to deal with the spiralling cost of living. MPs debated the Budget for a week during which many pointed at weaknesses in the plan, while others expressed doubt whether the government will be able to effectively implement the proposals. Some parliamentarians criticised the decision to slash the health sector allocation, saying the Sh300 billion the government had set aside for healthcare was not enough to deal with the many problems the sector is facing. They warned that the decision might impact negatively on gains made in areas such as maternal and child mortality. Ms Agripina Buyogera (Kasulu Rural-NCCR-Mageuzi) queried why the government had allocated such a small sum to the ailing health sector. MPs also faulted what they said was an inadequate allocation for the production of electricity. The critical lawmakers, most of them from the Opposition, said they doubted whether the government was really committed to addressing chronic power problems. In his alternative budget speech, the Shadow Minister for Finance and Economic Affairs, Mr Zitto Kabwe, noted, for instance, that development funds set aside for the Energy and Minerals ministry were enough to implement only two projects to produce 100MW and 60MW in Dar es Salaam and Mwanza, respectively. Mr John Mnyika (Ubungo-Chadema) said the allocation was “peanuts” when the importance of the sector and acute power shortages were taken into consideration.Mr Mnyika argued that since the government intended to tap into more revenue sources, it should have allocated more funds to the energy sector to spur manufacturing. “Power is important for the manufacturing sector, which is a major source of employment and production,” he said. He asked the government to set aside funds for the construction of a gas pipeline from Mtwara to Tanga through Dar es Salaam to promote the use of natural gas in the country. Mr Mkulo is also expected to respond to the contribution by Mr Godfrey Zambi (Mbozi West-CCM), who criticised the Budget for not considering the possibility of lending power tillers to farmers to increase agricultural production. He said the Budget had also not addressed the obstacles farmers face when applying for loans from financial institutions.“Most cannot access loans because they only possess traditional title deeds, which banks do not recognise as collateral,” Mr Zambi said. Mr Kabwe said in his alternative budget speech that the government was undermining social security funds by not paying the hundreds of billions of shillings it owed them.He said the government owed the Public Sector Pension Fund (PSPF) alone about Sh700 billion, adding that it was also yet to sign a contract with the National Social Security Fund (NSSF) on the construction of the University of Dodoma. The government has also been criticised for being vague on rising fuel prices, with some MPs challenging it to clearly state the levies it intends to abolish. Some said price reductions would be negligible even if the government scrapped some levies. Mr Ahmed Shabiby (Gairo-CCM) said the various levies constituted only four per cent of retail prices. He asked the government to speed up preparations for bulk fuel importation, saying this was the most effective way to control galloping prices.Some MPs also wondered why the government was reluctant to increase its revenues from the mining sector, saying it was supposed to earn much more than royalties alone. Mr Mkulo might also state whether or not the government would re-introduce the gold reserve at the Bank of Tanzania (BoT) as the way of destabilisation the shilling. Reported by Bernard Lugongo (Dar) and Florence Mugarula (Dodoma)