A PRO-POOR BUDGET ALLOCATION AND INTERVENTIONS

PRESENTED AT THE NATIONAL POVERTY POLICY WEEK

26TH NOVEMBER, 2013

SCOPE OF THE PRESENTATION1)Introduction2)Pro-poor budgeting and spending/interventions3) Pro-poor growth challenges4)Conclusion

1:INTRODUCTIONThe Government’s fiscal policies and strategies over the time have been developed with major emphasis to support pro-poor population especially those in rural areas. Such policies and strategies have been implemented through the Government budget, whereby various interventions have been pursued at all Government levels to support pro-poor growth. This presentation highlights major pro-poor interventions allocated in the 2013/14 budget to support pro-poor growth. According to Tanzania’s perspective, a budget is pro-poor when:

i.It creates employment opportunities and income for the vulnerable social groups such as youth and unemployed people; women; disabled people, etc.ii.It focuses on reducing income inequities;iii.It targets at sectors that benefit directly the most vulnerable groups; iv.It facilitates economic agents to deploy labour rather than capital intensive production techniques; v.It enhance human capital through provision of basic social services such as access to quality and affordable education, health, water, and other basic services;

1:INTRODUCTION CONTI---vi It facilitate investments in economic infrastructure in which the poor

people benefit directly specifically rural and trunk roads, rural energy; railway, agriculture, communications (mobile phones and internet), market access, etc; and

vii It enables access to credit facilities and financial services for the poor.

Other interventions, the pro-poor budget should focus on, include to enable:

i. Access to resources and assets;ii. Decentralization by Devolution (D by D Policy);iii. Access to loans and credits through SACCOS and other micro credit

facilities;iv. Land reform that can facilitate access to loans from financial institutions;

andv. Participation in budget formulation, execution and monitoring and

evaluation.

2: PRO-POOR SECTOR BUDGET ALLOCATIONS AND INTERVENTIONS

In implementing the aforementioned pro-poor policies and strategies, various intreventions have been implemented at sector level. The allocation of funds in the 2013/14 budget that have been earmarked for implementaion of such policies and strategies are narrated under each sector as follows:a) Transport sector

Transport sector which includes roads, bridges, railways, airports, ports and ferries has been allocated shs. 2,177.30 billion in 2013/14 as compared to shs. 1,940.0 billion allocated in 2012/13 equivalent to 15 percent of the total budget and 12.2 percent increase from the amount allocated in financial year 2012/13. The funds allocated to support pro-poor growth in transport sector include, among others:Shs. 143.1 billion to procure and repair locomotives engines and tracks; rehabilitation of railway equipments and railway stations facilities so as to enable easy mobility of passengers and cargo;Shs. 31.9 billion has been allocated for rehabilitation of regional roads to open up markets for agricultural products; andShs. 504.3 billion have been set aside under Road Fund Board to facilitate construction and maintenance of  different road projects executed by TANROADS and Local Government Authorities.

2: PRO-POOR SECTOR BUDGET ALLOCATIONS AND INTERVENTIONS….

b) Agriculture sector

The agricultural sector budget allocation for 2013/14 is Tshs. 908.10. The pro-poor budget allocation for agriculture sector include:

Shs. 7.40 billion for Agricultural Inputs Fund to facilitate availability of loans for purchasing inputs and implements such as tractors and power tillers, irrigation equipment and machinery and equipment for processing to add value;

Shs. 89.1 billion for sustaining the provision of fertilizers subsidies; Shs. 3.6 billion for provision of improved seeds and seedlings subsidies; Shs. 17.3 billion has been allocated for the Southern Agricultural Growth

Corridor of Tanzania (SAGCOT) for the purposes of increasing production of maize, rice and sugar;

Shs.110.4 billion for National Food Reserve Agency (NFRA) to purchase 250,000 tons of cereals from areas with food surplus; and

Shs. 67.30 billion has been allocated for strengthening agricultural services in Local Government Authorities, include extension services, construction of agriculture infrastructure such as feeder roads, abattoirs, irrigation schemes and markets.

2: PRO-POOR SECTOR BUDGET ALLOCATIONS AND INTERVENTIONS….

c) Energy and Minerals:

The budget allocation for 2013/14 is shs. 1,303.2 billion which is as an increase of 78.1 percent compared to shs. 731.8 billion allocated in 2012/13. Funds allocated for pro-poor growth are:

Shs. 339.9 billion for Rural Energy Agency and Rural Energy Fund to facilitate distribution of power to District Headquarters and other rural areas;

Shs. 273.2 billion have been allocated to TANESCO to facilitate power generation, transmission and supply;

Shs. 22.2 billion for construction of power distribution lines in Shinyanga and Mwanza to increase access to electricity;

Shs. 10.9 billion for provision of training to qualified Tanzanians in minerals and petroleum related courses and management of investment contracts; and

Shs. 19.8 billion for rehabilitation of power transmission and distribution lines in order to improve power supply reliability in Dar Es Salaam.

2: PRO-POOR SECTOR BUDGET ALLOCATIONS AND INTERVENTIONS-----d) Education Sector:

In the fiscal year 2013/14, the Education Sector has a budget of shs. 3,127.9 billion which is 7.6 percentage increase compared to shs. 2,890.1 billion allocation in the previous year. The pro-poor allocations include:

Shs. 126.8 billion to carter for operational costs in Primary Education, including examination costs and Capitation Grant;

Shs. 52.5 billion, for Special Schools to facilitate children with disabilities; Shs. 91.8 billion for the management and operational expenses in Secondary

Education, including costs for examination, Capitation Grant and school meals; Shs. 22.68 billion, for Teachers Colleges to facilitate operational costs such as supply

of food for teaching trainees, supply of teaching and learning materials, conducting Day Block Teaching Practice (BTP), conducting Tutors Education Programme for Pre-Service Grade A, as well as monitoring and evaluation in the implementation of Teacher Development and Management Strategy (TDMS); and

Shs. 306.1 billion for provision of loans to higher learning institutions students to open up more training opportunities for young men and women.

2: PRO-POOR SECTOR BUDGET ALLOCATIONS AND INTERVENTIONS-----e) Health sector:

The health sector budget allocation for FY 2013/14 is shs. 1,498 billion compared to shs. 1,289 billion allocated in 2012/2013, which is an increase of 16.2 percent. Funds allocated to finance pro-poor interventions include:

Shs. 92.05 billion for procurement of medical equipments and capacity building for Nurses, Doctors, and Midwives;

Shs. 305.7 billion has been allocated to facilitate diseases control programmes; TShs. 385.03 billion have been allocated for procurement and distribution of medicines in

dispensaries, health centers and hospitals; Shs. 271.57 billion have been set aside specifically for procurement of HIV/AIDS, Malaria and TB

medicines; Shs. 8.0 billion for cancer treatment national wide and procurement of Linear Accelerator

Machine to ease cancer treatment at Ocean Road Cancer Institute; and Shs. 79.55 billion for curative and preventive services and for control of communicable diseases

countrywide.

2: PRO-POOR SECTOR BUDGET ALLOCATIONS AND INTERVENTIONS-----f) Water Sector:

The Water Sector spending has increased significantly by 21.2 percent from shs. 616.9 billion in FY 2012/13 to shs. 747.6 billion in 2013/14. The following are the pro-poor allocations in Water Sector:

Shs. 151.5 billion is allocated for rehabilitation and expansion of Urban Water Supply Schemes;

Shs. 150.3 billion is set aside to implement District Water Supply Plans under the 10 Villages in 80 LGAs where 6,318 water points will be constructed;

Shs. 65.6 billion is set aside for implementing Quick Wins water projects all over the country;

Shs. 24.7 billion is set aside for drilling boreholes, constructions of Dams and water Transmission in the Regions;

Shs. 60.6 billion for expansion of Upper Ruvu treatment plant and construction of main transmission pipeline from Lower Ruvu to Dar es salaam; and

Shs. 35 billion is set aside for compensation and construction of Kimbiji and Mpera boreholes.

2: PRO-POOR SECTOR BUDGET ALLOCATIONS AND INTERVENTIONS-----g) Employment Creation

In ensuring employment creation among youths and other groups in the society, the funds allocated in the 2013/14 budget to finance job creation interventions include:

Shs. 1.0 billion for the Mwananchi Empowerment Fund Project, to finance Youth Self-Employment projects;

Shs. 0.50 billion for provision of loans to small entrepreneurs through Presidential Trust Fund;

Shs. 0.50 billion for poverty eradication and empowerment through Small Entrepreneurs Loan Facilities;

Shs. 3.02 billion has been set aside to finance Rural Micro Small and Medium Enterprises. The fund will be used to strengthen support services for establishment and development of small industries in rural areas; and

Shs. 4.0 billion for Women Economic Empowerment Projects. This fund will be provided as loans to women in rural areas where Women will form business groups to acquire loans.

3: Pro-poor Growth Challenges

Regardless of recent achievements recorded in reducing poverty in Tanzania, there are still several challenges that have to be addressed especially in rural areas. Some of the challenges include:

a)Reducing high unemployment rates especially in rural population;b)Reducing income inequity among the people;c)Reducing high population growth especially in rural areas; andd)Insufficient financial resources to support pro-poor interventions.

4: Conclusion

To ensure inclusive development, the Government will continue to implement and allocate more resources to pro-poor interventions in order to reduce poverty. This will include, among others, allocation of more resources to enhance good governance and rule of law so as to ensure that all citizens participate effectively in the development process. Participation of rural people in planning and budgeting process will also be strengthened in a bid to ensure that Local Authorities programmes and projects are the ones with more impact in poverty reduction. The prime objective is to ensure all functions and resources which are local in nature are decentralized to the local government levels and thus empowering communities to manage their own resources.