Borrow Budget Ideas to Solve Challenges

The Citizen (Dar es Salaam)

2 June 2011

editorial

As the government prepares its new Budget, it has to juggle figures and seek ways to fund its estimates. This is not an easy challenge, considering the numerous challenges, which have been compounded by mounting economic difficulties. However, being a responsible administration, it should be open to any positive suggestions or ideas on how to tackle these problems.

An interesting proposal that is worth considering has come from the opposition. In its alternative budget, the opposition argues that it is possible to reduce fuel prices by 40 per cent. If this could be done, it would greatly ease the burden on industry, organizations and even individuals, as the cost of fuel is currently seriously eroding their resources.

In the recent months, there has been a sharp increase in the prices of petroleum products. A litre of petrol or diesel now sells at more than Sh2,000, while that of kerosene costs between Sh1,500 and Sh1,590. While the opposition’s 40 per cent fuel price reduction idea is exciting, they have yet to provide the details on how this can be done. We, therefore, hope that they are not just playing politics with the aim of pushing the government into a corner.

The lowering of fuel prices without compromising the growth of other sectors of the economy, would provide part of the answer to a problem that threatens to hamper national growth and development.

But what is clearly evident is that there are too many charges and other levies on petroleum products, which naturally push up the price. In fact, it is quite likely that the opposition is looking at the possibility of scrapping of some these charges. They range from TIPER fees and application and testing charges, to certification fees. Besides driving inflation to 8.6 per cent, the impact of high fuel prices is being felt, with commodity prices skyrocketing and pushing up the cost of living.

As a key driver of the economy, petroleum products are an essential part of everyday life, playing a pivotal role in the transport and manufacturing sectors. Anything that can bring the prices down will, therefore, be highly welcome. There is no reason why the government cannot borrow a leaf from the opposition’s book to ease economic woes.

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