Experts fault JPM’s Sh50m village promise

13Feb 2016
Imani Lwinga
The Guardian
Experts fault JPM’s Sh50m village promise

Experts have poured scorn on President John Magufuli’s pre-election campaign promise to load every village across the country with a whooping of Sh50m, ridiculing it as a philanthropic move too hard to afford for a politician fighting poverty from political platforms, but short of strategies.

President John Magufuli

“Have you ever heard him talking about it after winning the presidency?” queried Professor Gaudence Mpangala of the Iringa-based Ruaha Catholic University (Rucu) yesterday, adding over the phone; “On my part I have never heard Magufuri as president talking about the billions he promised the villagers…. it was just a campaigning tool to influence voters’ patronage.”

Magufuli’s government would be prompted into raising a staggering amount of Sh600bn about 12,000 villages countrywide to get its promised dues of Sh50m.

But the Professor believes that the pledge was just a political rhetoric designed to win the minds of electorates, saying the Sh50m for each village is too small amount for any developmental changes and that the pledge should not be taken seriously.

“It’s quite impossible to eradicate poverty through political platforms. It requires strategic plans and for that Sh50m for the whole village is even not significant at all. Think of Sh50m from an individual level; what would you do with it? Not to speak of a village,” he said.

“They (the government) should not even think of dishing out such amount as it will hardly change anything. I just liken this with his predecessor’s “JK billions” which did nothing tangible to the community. No one has so far told us if the JK billions had been a success story,” he added.

Although it is still unclear as to how the money would reach the beneficiaries, analysts contend, the anticipated failure may come out of a campaign bias to focus more on publicity side of the the promise than its professional evaluation.

Other common promises, however, which had touched many of his spectators included establishing small scale industries of the middle income and bigger ones as well as the provision of free education from primary school up to secondary school level that started with a lot of challenges last month.

The President also made include the construction of health centres in every ward, designated district hospitals as well as promotion of the regional levels into referrals.

Julius Mtatiro, a Dar es Salaam-based political analyst said the Sh50bn dream is unlikely to come true in the near future in a situation where the government coffers are empty.

“Recently a CCM caucus objected a plan by the government to channel all the money collected by local government councils to the general account at the Central Bank.
All this kind of decisions shows that the government needs every cent collected,” said Mtatiro, adding that with such moves it would be impossible for the government to dish out the funds to villages

He was referring to recent debate on the National Development Plan in which the central government wants all finances including those collected by local government authorities be channeled into the centralized government account at the Bank of Tanzania (BoT).

He said the government had been facing a myriad of challenges and that the issue of free education had also raised more questions than answers especially after the government had distributed token amounts of money to respective schools.

“The Sh50m is quit impossible for now and is not even implementable. We instead need better roads and more funds for education; so how would it be possible for a bankrupt government to get such amount of money for villages?” he queried.

Mtatiro was of the opinion that the government might re-emerge with an idea of Sh50m come 2019 to play with the minds of electorates, referring to the practice as “election corruption”.

Should this initiative fail to take - off or fall short of bringing any positive outcome, it would be the third fail by the government to interpret its promises from politically derived avowal to technically backed enterprising initiatives, he said.

But Prof. Mpangala insisted that the government should instead empower people on agricultural-linked investments such as modern farming, market for their produces, agro-processing industries, infrastructure such as communications and transportation, electricity as well as health facilities to keep them enterprising.

The previously failed empowerment schemes include the JK Billions to which at least Sh50bn was dished out through commercial banks for pubic to be able to secure as soft loans. The other was the Credit Guarantee Scheme for small and medium enterprises introduced by the government through the Central Bank almost 10 years ago.

This proved failure after many SMEs failed to secure the loans through the banks.It should be recalled that during the financial year 2006/2007 the Government committed a total of Sh 21bn to establish the Economic Empowerment and Job Creation Programme in order to promote, support and empower small and medium Tanzanian citizen entrepreneurs engage in productive activities to access loans.

These included Savings and Credit Cooperative Societies (Saccos), Formal and informal economic groups and individual entrepreneurs.The main objectives of the programme were to increase incomes of small and medium entrepreneurs and to create new jobs for Tanzanian citizens.

The programme was planned to be implemented in two phases and each phase was allocated with Sh10.5 bn as loan fund. Two different windows were designed to channel the funds to entrepreneur - one window was as a ‘guarantee facility’ and the other one as ‘an on lending facility’.

In the case of the on lending facility, it was agreed that banks and other financial institutions participating in the programme would issue loans to entrepreneurs amounting to exactly the same amount of fund deposited by the government.

Implementation of phase I started in November 2006 when the government deposited Sh5.25bn to the CRDB Bank and another Sh5.25bn to the National Microfinance Bank (NMB) as guarantee.

According to the agreement with the government, the banks were obliged to issue loans to entrepreneurs three times as much the amount deposited by the government which is equivalent to Sh31.5bn.

In this phase CRDB issued loans to Saccos, where as NMB was issuing loans to individual entrepreneurs.Implementation of phase II started in December 2007 and concentrates mainly in the 78 districts that were either not at all reached or inadequately funded during Phase I.

The Government issued Sh10.5bn for the implementation of Phase II and out of that amount Sh9.9bn was allocated to Tanzania Mainland and the remaining Sh600m to the Revolutionary Government of Zanzibar for a similar programme.

Out of Sh9.9bn allocated to Tanzania Mainland, Sh8.947bn was disbursed to 12 financial institutions to cater for both, as ‘guarantee facility’ and ‘on lending facility’.

According to credible sources, by December 2013, a total of Sh49.65bn was issued as loans to 76,824 entrepreneurs, 192 Saccos and 86 groups in all of the two phases.

Despite this, experts had raised alarm over the significance of the JK billions which were derived from political drive in an attempt to win voters’ mind but not initially documented in the respective party’s election manifesto, somehow making it hard not only on sourcing the funds but also on executing it.

Nevertheless, frequent middling by both senior government officials and politicians posed a lot of concern that this would have triggered a premature collapse of the fund. The government decision to channel loans through the banks had an aim of starting a revolving fund, otherwise it could have directly provided them to vulnerable groups of women and youth.

Other common promises, however, which had touched many of his spectators included establishing small scale industries of the middle income and bigger ones as well as the provision of free education from primary school up to secondary school level that started with a lot of challenges last month.

The other promises he made include the construction of health centres in every ward, designated district hospitals as well as promotion of the regional levels into referrals.

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