Queries Over Treasury’s Sh1 Trillion Budget Allocation

The Citizen (Dar es Salaam)

Samuel Kamndaya and Edward Qorro

4 June 2011

Dar Es Salaam — The government has allocated about Sh4.3 trillion to five ministries in the 2011/12 Budget, equivalent to 32 per cent of the entire Sh13.5 trillion plan, according to proposals seen by The Citizen on Saturday. The biggest chunk will go to the Works ministry, which is to receive Sh1.25 trillion for development projects and Sh245 billion for recurrent expenditure.

While experts and other stakeholders praised the record allocation to the ministry responsible for infrastructure development, they queried the Treasury’s proposed share of a whopping Sh1 trillion for recurrent expenditure and about Sh400 billion for development projects. The Treasury’s allocation for recurrent expenditure skyrocketed from Sh252 billion in 2009/10 to Sh960 billion in the current financial year.

Analysts and commentators who spoke to The Citizen on Saturday yesterday wondered why the Treasury has been allocated much more funds that the Energy and Minerals; Health and Social Welfare; Water; and Education and Vocational Training ministries, which are to receive Sh400 billion, Sh584 billion, Sh445 billion and Sh658 billion, respectively.

“The proposed allocations to the Treasury are ten times more than in previous years. The energy, health and education sectors need much more funds than the Treasury,” said Prof Ibrahim Lipumba, a seasoned economist and opposition politician.

He said the Finance and Economic Affairs ministry had no development projects to justify its Sh400 billion allocation.

Dr Honest Ngowi of Mzumbe University echoed Prof Lipumba’s views.

“Allocations to the Treasury raise many queries. Normally, the Treasury deals with public finance management issues… it is not very much into development and one would therefore expect that the lion’s share of the budget would go to productive sectors such as agriculture, energy, education and health,” he said.

Prof Delphin Rwegasira, Mwalimu Julius Nyerere Professorial Chair in Development at the University of Dar es Salaam (UDSM), said the Treasury share was justifiable in that it had many sensitive responsibilities, including managing the national budget itself and tracking public expenditure for the whole government.

He said allocating more money to the energy sector would immediately solve the longstanding power problems.

“The power crisis can be solved through having the right long-term strategies. We need to resort to new strategies to handle the energy crisis and these strategies ought to be carefully looked into,” said Prof Rwegasira, who also teaches economics at UDSM.

For his part Dr Semboja Haji of the UDSM said the huge Treasury allocation could mean that the government had decided to clear longstanding debts.

“This could be an indication that there are a number of debts in various segments of the economy that have not been settled, and the government has decided to clear them through the Treasury,” he said, noting, however, that the picture would become clearer when the Finance and Economic Affairs minister elaborates.

The government has set five priority areas in the 2011/12 Budget compared to 13 priorities in the current budget. They are energy, infrastructure, human resources development, agriculture and water.

The Budget to be tabled in Parliament next week will be implemented amidst mounting economic challenges brought about by high oil and food prices, the power crisis and dwindling revenue sources.

Stakeholders have appealed to the government to reduce taxes on petroleum products to cushion low-income earners against the rising cost of living.

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