Friday, June 15, 2012
HIGHLIGHTS-UGANDAN , TANZANIAN BUDGETS 2012/2013
Following are highlights from the Ugandan and Tanzanian budgets for the 2012/13 fiscal year starting in July.
The Ugandan budget is being read by Finance Minister Maria Kiwanuka. The Tanzanian budget is being presented by Finance Minister William Mgimwa.
Kiwanuka confirms growth 2011/12 estimates given by statistics office in May. GDP growth slowed to 3.2 percent, with services sector up 3.1 percent, industrial production up 1.1 percent and agriculture 3.0 percent.
Fiscal deficit including grants expected to rise to 4.1 percent of gross domestic product from 3.9 percent in 2011/12.
Thereafter, to decline to 3.4 percent of GDP in 2013/14, 1.4 percent in 2014/15, 1.2 percent in 2015/16, and 0.0 percent in 2016/17.
"I propose to mobilise Grants and Loans amounting to 2,679 billion shillings, which represents 25 percent of the National Budget, and consists of project and budget support loans. Resources will be allocated towards counterpart financing of infrastructure projects and the improvement of service delivery. In addition, Government will borrow non-concessional loans to undertake major infrastructure projects that demonstrate the necessary commercial and economic benefits, for which other financing options are not available.
"The total amount of resources available in financial year 2012/13 is estimated at 11,157 billion shillings. Domestically mobilised resources, including tax collections and domestic borrowing will finance about 75 percent of the budget during 2012/13, whilst 25 percent will be provided by development partners."
"Revenue collections for next financial year are projected at 7,251 billion shillings. Total debt service including interest payments are projected to amount to Shs1,101 billion in financial year 2012/13. This means that Shs10,057 billion will be available to support economic and social development programmes."
BALANCE OF PAYMENTS
"Export of goods and services during the year totaled $4.1 billion, compared to imports of goods which amounted to $5.31 billion. In addition, Services payments were recorded at $2.23 billion. However, the overall balance of payments was positive, on account of increased inflows of remittances amounting to $2 billion, foreign direct investments amounting $834 million, and portfolio flows amounting to $274 million.
"We must therefore continue to concentrate on export growth in order to reduce the gap between imports and exports which has been widening over the past years."
"The Central Bank Rate will be eased as conditions improve. Tight monetary policy has succeeded in bringing down the price level and has restored macroeconomic stability."
"I propose to increase the withholding tax on income derived from Treasury Bills and Bonds from 15 percent to 20 percent as a final tax. This measure will generate 16.3 billion shillings."
VAT ON WATER, INCOME TAX
"I am also proposing that an additional 10 percent be imposed on individuals with chargeable income of 120 million shillings and above, per year."
"In this financial year, I propose to reinstate VAT on water at 18 percent. This measure will generate 21.7 billion shillings."
Finance Minister William Mgimwa said the budget will place emphasis on electricity generation and distribution, transport, water and information and communication technology.
"Out of this amount, shillings 7,080.1 billion is tax revenue and shillings 644.6 billion is non-tax revenue. Revenue from Local Government Authorities is projected at shillings 362.2 billion equivalent to 0.7 percent GDP," Mgimwa said.
EXTERNAL NON-CONCESSIONAL LOANS
"Taking into account huge requirement of funds to develop infrastructure projects in 2012/2013, the government expects to borrow external non concessional loans amounting to shillings 1,254.1 billion equivalent to $746 million."
"The level of borrowing has taken into consideration macroeconomic indicators in order to avoid crowding out of private sector."
DEVELOPING NATURAL GAS PIPELINE
"The Government will implement the gas pipeline construction project from Mtwara to Dar es Salaam using a loan amounting to USD 1,225.3 million from the Exim Bank of China. The loan will be managed by the Tanzania Petroleum Development Corporation (TPDC)."
ON ECONOMIC CHALLENGES FACE BY TANZANIA IN PAST YEAR
"The challenges include availability of reliable electricity supply; increase in world market oil prices; food shortages in some parts of the country; increase in prices of goods and services; late disbursement of local development funds due to bureaucratic procedures on accessing non concessional loans."
(Reporting by Elias Biryabarema in Kampala, Fumbuka Ng'wanakilala in Dodoma; Editing by David Clarke and George Obulutsa)