Tabling the National Economy Status-2018 and the National Development Plan 2019/20 in the National Assembly yesterday, minister for Finance and Planning Dr Philip Mpango said the amount takes up 37 percent of the 2019/20 national budget.
He said that this rate is acceptable as it is in line with National Five Year Development Plan that sets between 30 and 40 percent of the total budget for development projects.
Dr Mpango said that the government plans to implement the development budget from different sources including revenue from taxes, loans and grants from development partners, partnership between government and the private sector, foreign direct investments and international funds for climate change related actions.
The minister outlined five economic targets and goals for the 2019/20 fiscal year, led by accelerating economic growth pegged at 7.1 percent compared to 7.0 in 2018.
The plan also seeks to continue controlling the inflation rate at one digit between 3.0 and.5 percent as well as reaching tax revenue at 13.1 percent of the Gross Domestic Product (GDP) in 2019/20 from 12.1 percent in 2018/19 estimates.
Government expenditure is expected to reach 22.7 percent of GDP in 2019/20 estimates while in current budget estimates including external support expenditure is expected to reach 22.3 percent of GDP, he said.
Strategic development projects for the 2019/20 are part of continued implementation of the National Five Year Development Plan stretched out from fiscal 2016/17 to 2020/21.
“The focus is to build an industrial economy that will stimulate employment and sustainable social welfare,” he said, noting that under this objective, the government is pushing for industries that use locally available raw materials.
Other development plan areas include improved agriculture, making easily available improved seeds and other inputs for farmers. The government will improve livestock reproduction farms and encourage proper use of technology, he stated.
On improving the country’s investment climate, the minister told the House that projects to be implemented under this goal include renovating infrastructure in effort to simplify communication and transport.
Risks to the 2019/20 budget implementation likely to be encountered and grossly affect the budget were outlined, stemming from within and outside the country.
Internal risks include shortage of financial resources, lack of participation of the private sector, land ownership bottlenecks and ill adapted resolution to solve land occupancy conflicts, environmental degradation and cyber-security.
Significant external risks include regional and international economic turbulences, international conflicts and climate change, the minister added.