Budget should transform economy, society-Economists

The economics were speaking to Smart Money on wide-ranging economic issues as the Finance and Economics Affairs Minister, Dr Phillip Mpango, gears up to table his maiden national budget in June this year.

By giving priority to the industrial sector, the government will be spurring the modernisation of the economy and hence overcome the most serious problems afflicting the country, the experts argue.

According to them, reduced transportation cost would, for example, improve competitiveness and serve as a great impetus for high value-added activities in the sector.

Prof Amon Mbele of the Economics Department at the University of Dar es Salaam said any measures to revamp the economy should not only aim at transforming industries through innovation and enterprise, but also address the immediate cyclical weaknesses.

According to him, social policies need to be centred on forging greater partnerships to build on the government’s social support schemes so as to encourage collective responsibility involving individuals, the community and the government.

He said the key focus areas on the national budget is to meet the challenges, including investing in building stronger enterprises, nurture innovative industries, invest in education and health, better liveability and connectivity and more investment in intelligence, operational capabilities, technology and systems.

“This will enable local companies to emerge stronger to benefit from the broader global recovery when it takes place,” he told Smart Money. He pointed out that the spirit of partnership where Tanzanians will work together to forge new ways to transform the economy and the society is the core to success.

Prof David Wield, Director of Innogen in the School of Social and Political Science, Edinburgh, once highlighted the importance of growing medical technology and chemicals sectors in manufacturing, export of services, domestic-oriented sectors such as retail, healthcare and education as well as construction as crucial in economic transformation.

Reminding the government about three key thrust to address the challenges of economic transformation, he said adopting expansionary fiscal stance, industry transformation programmes and supporting people through change were some of the crucial areas.

According to him, the upcoming budget should set a platform that would enable companies to provide trade information and authorise its use by logistics providers as well as business partners. The information can also be used for customs and other trade regulatory approvals.

This would especially be helpful for SMEs to cut costs and streamline processes, noted Prof Wield.

“The platform must be envisioned as an open innovation one, so that other service providers can develop value-added services and apps in areas such as operations, visibility and trade finance,” he said.

In line with an industrial transformation programme, more targeted by the government, Prof Wield suggested continued tapering broad-based measures such as a productivity and innovation (PIC) scheme.

Addressing cyclical weaknesses, former Executive Director of Repoa Prof Samuel Wangwe (pictured), said efforts should be taken to transform industries through innovation and entrepreneurship. There would be a significant economy-wide initiative aimed at helping industries find new areas of growth.

“The upcoming national budget 2016/17 should put a programme that will facilitate Tanzanians to work together in new ways to transform the economy and society. Everyone has a role to play, and together, we are weaving a hanging wall, each in a diverse colour and texture.”

According to him, the budget has to boost the economy, steer away from the recent focus placed on social spending inducements.

He suggested that this financial budget should concentrate on alleviating livelihood concerns, with measures aimed at addressing the widening income gap, under-investment in public housing and over-burdened transportation infrastructure.

The FY16 budgetary focus must clearly shift back to strengthen the economy by helping local companies overcome challenges, he stressed, adding that policies would be directed at helping local firms improve revenue and cushion labour market risks.