ONE of the good things about the national budget for the financial year 2010/11 presented on Thursday by the Minister for Finance and Economic Affairs, Mr Mustafa Mkulo, is the fact that the government is determined to provide meaningful social services to the people.
To demonstrate this resolve, the government budget has given priority to six sectors of social services and economic infrastructure, which altogether received the bigger chunks of the money – in order to improve the people’s well-being.
The sectors – agriculture, health, education, energy, water and infrastructure development – are allocated over half of the total budget for 2010/11.
We welcome the move by the government to put these sectors on the top of its priority list. But we think after everything is in place it will be imperative for the government to ensure that these services become affordable.
As expected, the budget has elicited mixed reaction from a cross-section of the society with some terming it balanced while others felt it has offered no relief for the ordinary people. The argument is that while there are some welcome initiatives in the budget speech, they do little, if anything, to offset the tax burden on ordinary people.
In our opinion, the budget is balanced given the prevailing economic situation of the country. Giving priority to agriculture, which is the backbone of the economy, is a positive move which if well implemented will have multiplier effects in the economy at large.
But it must be noted that agricultural development will depend on other sectors’ contribution such as infrastructure, credit and other financial services, education, markets and industries.
In order to boost agriculture, the government has introduced many tax exemptions with the most notable being the scrapping of Value Added Tax (VAT) on transportation of agricultural products within the estates; on agricultural implements such as combine harvesters, pick up balers, hay making machinery and the mowers used in agricultural production and livestock.
Another encouraging move by the government is that of granting VAT exemption on machines and equipment used in the collection, transportation and processing of milk products.
We take note of the challenge the government has thrown to the private sector, which is expected to positively respond to the opportunities that will come up in agriculture in collaboration with the government, and provide the other needs of the sector, including producing fertilizer locally.
The government must ensure that our agriculture becomes modernised with high productivity if we have agro-processing industries and stop selling raw materials. These industries ought to be built by the private sector.
As observed by other stakeholders, we also believe that the budget will only achieve its objectives if it will be implemented effectively.