Tall order as Magufuli’s maiden budget unveiled

It’s a budget that has presented a major shift in the allocation of resources for the nation ’s various sectors of the economy.

It’s an ambitious budget that clearly spells out President John Magufuli’s commitment to austerity measures targeting to reduce unnecessary recurrent expenditure and give development projects priority.

It’s a maiden budget in the implementation of the 2016/17 to 2020/21 Five Years Development Plan (FYDP) which lays emphasis on industrialization. Over 11trn/- has been allocated for development, accounting for over 40 per cent of the total budget marking a major shift in the way resources were allocated previously.

In the past five years or so, a big chunk of the national budget was allocated to recurrent expenditure while development budget was largely dependent on external financing.

President Magufuli’s austerity measures started way back in November last year soon after his coronation when he ordered over 4bn/- allocated for independence day celebrations on December 9, be used to expand Mwenge to Morocco road in Dar es Salaam.

Dr Magufuli later on disrupted Parliament’s inaugural fete which was allocated over 200m/- when he ordered that the bulk of the cash should be used to buy new beds and mattresses for patients at Muhimbili National Hospital.

The FPG’s austerity measures have been backed by a crackdown on high level graft and embezzlement of public funds, two major conduits of loss of government revenue.

While plugging loopholes through which government revenue leaks, President Magufuli’s administration has also rolled out use of electronic fiscal devices starting with public institutions such as the police force and the private sector.

Plugged revenue loopholes, chopping cherry party spending and sacking thieving public officials will certainly boost Dr Mpango’s coffers which will be responsible in bankrolling the 2016/17 ambitious budget.

It is therefore commendable that the decision to rollout EFD machines and cut luxury expenditure in the government has come at a time when the country has targeted to invest in huge infrastructure projects which include: infrastructure, energy, transport, agriculture, education and health.

Days when development budget was a responsibility of external funding are over and as President Magufuli and minister Mpango have said, at 55 since independence from Britain this year, Tanzania is no longer an infant nation, it’s a fully grown up nation that must take responsibility of its own challenges.

The way to achieve this it had already been shown by the president himself leading the way , broaden the tax base, plug the loopholes and invest in infrastructure. Since change of guard at Tanzania Revenue Authority last December, with briefly Dr Mpango and now Alfayo Kidata as Commissioner Generals, monthly revenue collection had sustainably peaked over 1trn/-.

Despite the election fever period when businesses went down and the pre-budget period (April/June), TRA had maintained the 1trn/- mark in monthly revenue collection which means the revenue body will do much better starting next July when the situation normalises.

It is important that the government works closely with the private sector which pays taxes in implementing its national budget and FYDP 2016/17 to 2020/21.