NAIROBI, June 14 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
"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
"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
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
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
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
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