UAMUZI WA BUSARA WAOKOA SHILINGI BILIONI HAMSINI

PIUS RUGONZIBWA, 27th March 2009 @ 09:35

The Government has saved about 50bn/- this year that would have otherwise been used for procurement of luxury vehicles and expenditure on seminars. The money will now be directed towards supporting agricultural services.

The Minister of Finance and Economic Affairs, Mr Mustapha Mkulo, said this in Dar es Salaam today when addressing participants to a consultative Forum on the state of Tanzania’s Economy in the face of Global Financial and Economic crisis. He said the country has initiated various measures to mitigate the effects of global financial crisis to the national economy.

The Permanent Secretary in the Ministry of Infrastructure Development told the press later that the funds (50bn/-) were allocated for the current financial year and that the government usually purchases at least 400 new vehicles a year. On the effects of the crisis, Minister Mkulo explained it was clear that Tanzania would be affected by the crisis.

He mentioned various sectors which are the engines of the national economy including agriculture that would be most affected. He said apart from maintaining sufficient food stocks for the country’s Strategic Grain Reserve (SGR), efforts were also directed towards provision of food relief to areas with critical shortage.

“In this regards, the government has beefed-up budgetary resources to subsidise production and use of fertilizer and other agro-inputs to improve production and productivity in agricultural sector,” he said. As a result of the crisis, Tanzanian General Domestic Products (GDP) growth will drop from the current 7.5 per cent to between 6.5 and 6.9 per cent and growth in agriculture will decline from 3.6 per cent in 2008 to 3.1 in 2009, according to the minister.

On tourism sector, the Tanzania National Parks Authority (TANAPA) has already registered a shortfall of 15 per cent of the expected number of tourists visiting the country, Mr Mkulo explained, adding that in this season alone, tourists arrivals were anticipated to fall by 18 per cent. He said the coming national budget would equally be affected bearing in mind that domestic revenues would also dwindle.

The government, he said, has urged Development Partners and the international community to maintain their support to the General Budget Support (GBS) to poor countries, including Tanzania, in view of the likely shortfall in domestic revenues collection. “We have also encouraged private sector entrepreneurs to look for alternative markets in the region as well as in Asia as a way to deal with the problem of reduced demand for exports to their traditional European market,” he said.

On mining sector, the forum was told already tanzanite and diamonds have dropped in the World Market. Tanzanite is sold at 200 US dollars per carat from the previous 500 US dollars per carat. Diamond dropped by almost 60 per cent. According to the Ministry of Energy and Minerals, the opening of the Kabanga Nickel Project in Kagera Region was delayed, thus, another delay of the revenue to the government totalling about 1.9million US dollars.

The ministry further announced that about 200 workers of North Mara Gold Mines would be retrenched while other companies are now pulling out from previously viable ventures. “The financial crisis should be taken as a wake-up call to our country by reducing donor dependency and using energy efficient technologies," reads part of the presentation by the ministry. The meeting continues today where other stakeholders will present their deliberations.