ANALYSISBy Jonia Kashalaba

Small and medium enterprises (SMEs) play a crucial role in the economy of developing countries like Tanzania. According to the Tanzania Chamber of Commerce, Industry and Agriculture, more than 95 per cent of businesses in Tanzania are SMEs which together contribute 35 per cent of the country’s Gross Domestic Product (GDP) and generate up to 40 per cent of total employed workforce.

Despite their contribution to the economy, SMEs in Tanzania face a number of challenges affecting their growth and profitability. One of the major ones is compliance with tax regulations with regular complaints on multiplicity of taxes and high tax rates.

Additionally, most SMEs lack experience with regards to tax matters making the cost of complying with tax regulations high. As a result, most of their revenues go into paying taxes and complying with tax regulations. The consequence of this is that the SMEs either close due to lack of profitability or hide in the informal sector.

Although taxation of businesses is a necessity as a source of the government’s revenue, in my view, reducing the tax burden for SMEs would have a positive impact on the country’s economy. For example reduction of payroll taxes (e.g. removal of requirement to pay SDL) would encourage SMEs to employ more people. Furthermore, reduction of tax rates would encourage more small businesses to operate in the formal sector and thus increase the tax government collections.

So what can be done to improve the tax environment for SMEs? My suggestion would be measures to reduce the tax burden on such SMEs both in terms of administrative cost and actual tax cost, by special measures for SMEs that reduce both the number of taxes paid (and therefore the administrative burden) and tax rates.

An increase in the annual VAT threshold (from Sh100m (approximately $45k) to say Sh200 million (approximately $90k) is one of the changes that could be made. This would free many SMEs from the administrative challenges of VAT accounting. Many might say that this is a significant jump considering that the threshold was only recently increased to Sh100 million from Sh40 million. However, the point is that most VAT revenues are generated from a narrow band of goods and services on which most of the budget of the ordinary consumer is spent – for example, telecommunications, electricity, soft drinks, alcohol and tobacco products, sugar and cement.

So such a change is unlikely to lead to any significant loss of tax revenue. Indeed such a change may instead result in a positive contribution to tax revenue based on (a) certain taxpayers declaring higher revenues so as to be able to remain VAT registered and thereby offset VAT inputs; and (b) other taxpayers being deregistered (resulting in a revenue gain if VAT on inputs (no longer claimable following deregistration) exceeded the additional VAT they accounted for on their margin (prior to deregistration)).

Although the threshold in our neighbouring countries is not dissimilar (Kenya Ksh 5 million, c. $50k; Uganda UGX 150 million, c $45K; Rwanda RWF 20 million, c. $31k)), it is clear from PwC’s recent “VAT in Africa” publication that there are a number of other African countries with much higher VAT registration thresholds – including Botswana (c. $92k), Gabon (c. $122k), Lesotho (c. $70k), Zambia (c. $80k), Zimbabwe ($60k). Accordingly, a move to a threshold equivalent to $90k would not be unreasonable.

Indeed I would argue that one could even contemplate a move to a much higher figure of Sh500 million than Sh200 million that I propose but I assume that this would be a step too far for the policy makers.

The inability to claim input tax for those below the VAT registration threshold could in fact represent a tax increase from some businesses, and so another proposed change is a reduction of the income tax rate (from 30 per cent to 15 per cent) for companies with annual turnover below the VAT registration threshold. Given the likely increased tax burden resulting from inability to reclaim VAT inputs, it is not unreasonable to reduce the income tax rate. In addition, such a change is more likely to encourage compliance.

I also propose that skills and development levy (“SDL”) should not apply to companies with turnover below the VAT registration threshold. Currently, all companies with more than four employees are required to pay SDL at a rate of 4.5% of payroll costs and file monthly SDL returns. This risks discouraging small businesses from hiring many employees and in some cases also discourages compliance.

The proposed change (which could alternatively be linked to headcount rather than turnover) would reduce the payroll tax burden and thus encourage formalisation of businesses, hiring of more employees, and compliance by businesses that are currently not complying. Perhaps this would also improve Tanzania’s Paying Taxes ranking (as excessively high payroll taxes are a key contributor to our poor ranking in the Paying Taxes indicator of the World Bank “Doing Business” publication).

Most of you may ask what would be the economic impact of the proposed tax changes. The answer to this is that the impact (if any) will not be significant as tax collection statistics show that most of revenue collections are either from (i) large taxpayers department or (ii) taxes on imports.

In particular, based on the TRA revenue collections report for the six months to December 2016, 80 per cent of the revenue collections are from imports and large taxpayers. This does mean that the revenue risk of tax reductions targeting SMEs is relatively little. In addition, as noted above, the potential upside from increased taxes resulting from increased compliance could be significant.

Ms Kashalaba is a tax manager at PwC Tanzania. The views expressed do not necessarily represent those of PwC.)

Maputo — The Mozambican government has banned the import of all birds and their derivatives from Zimbabwe, following an outbreak of avian flu in that country.

The measure, announced on Monday by the National Veterinary Directive (DINAV), covers all domestic poultry, wild birds, day old chicks, hatching eggs, fresh meat from birds, and all derivatives intended for use in animal feed.

The ban follows an outbreak of avian flu, notified on Thursday, on a poultry farm in the Zimbabwean province of Mashonaland East, which led to the destruction of 715,500 chickens.

There are various strains of avian flu, and the one discovered in Mashonaland East, according to a report in Tuesday’s issue of the Maputo daily “Noticias”, is the most damaging type. This strain, known as H5N8, is highly contagious and lethal to poultry, with a mortality rate of 100 per cent.

Mozambique’s National Veterinary Director, Americo Conceicao, said the avian flu virus is easily transmitted from one poultry farm to another by contaminated equipment, vehicles, clothing and chicken feed.

“Wild birds are a source of transmission of this flu”, he said, “We, and mainly our poultry producers, must step up our vigilance in our production units. All cases of mortality must be notified immediately, so that we can take measures in good time”.

Producers should also notify the veterinary authorities if they notice problems with their birds’ breathing or nervous system, and outsiders should be banned from poultry farms, in case they are unwittingly carrying the disease.

So far there have been no cases of H5N8 registered in humans, said Conceicao, “but bio-safety measures must be observed to avoid risks of contamination”.

This strain of the avian flu virus has not yet been observed in Mozambique.

The Senate on Tuesday initiated moves to probe the President Muhamadu Buhari’s Ogoni land cleanup as the legislature directed its committee on environment to investigate the implementation of the cleanup.

The exercise was launched by President Muhamadu Buhari in 2016 with an estimated cost of $1 billion.

The decision of the Senate followed a motion moved by Sen. Oluremi Tinubu, Chairman, Senate Committee on Environment to mark the World Environment Day.

The senate directed its committee to also assess the progress of the Great Green Wall programme initiated to control desertification in the country.

While moving the motion, Sen. Tinubu expressed dismay that despite the launch of the project, work has not commenced in the area.

Contributing, Sen. Magnus Abe corroborated that there was nothing on ground yet to show that the clean up was designed to actually cleanup the area.

He said that farmlands were still polluted while rivers of oil spills still abound.

Abe urged the Federal Government to review the country’s environmental regeneration programmes to take care of environmental issues in the country.

Ogoni land is located in Rivers State on the coast of the Gulf of Guinea, east of the city of Port Harcourt.

It extends across the Local Government Areas (LGAs) of Khana, Gokhana, Eleme and Tae.

In a 2011 assessment of over 200 locations in Ogoniland by the United Nations Environment Programme (UNEP), it was found that impacts of the 50 years of oil production in the region extended deeper than previously thought.

Because of oil spills, oil flaring, and waste discharge, the alluvial soil of the Niger Delta is no longer viable for agriculture.

Furthermore, in many areas that seemed to be unaffected, groundwater was found to have high levels of hydrocarbons or were contaminated with benzene, a carcinogen, at 900 levels above WHO guidelines.

In the 2017 Democracy speech by Acting President, Prof. Yemi Osinbajo, he said that the Ogoni Land clean up was an environmental priority of the government which was why it began last year.

ANALYSISBy Abduel Elinaza

The National Microfinance Bank (NMB) has issued a dividend of 16.5bn/- to the government for 2016 since the government owns 31.8 per cent of the bank.

The bank was separated in 2000 from National Bank of Commerce (NBC).

Actually the government picked the best branches of NBC and sold them to ABSA Group of South Africa. Finance stakeholders had it then, that the bank, NMB, was left for dead. However, the government proved them wrong and turned the bank around.

Today NMB is the largest bank in the country in term of profitability. NMB has been providing dividend immediately after the government sold it’s share to a consortium led by Rabobank of the Netherlands with 34.9 per cent, the public 25 per cent, NICOL 6.6 per cent and TCCIA Investment 1.7 per cent.

The NMB story teaches us one lesson that the government reaps not only its investment in NMB through dividends but also from taxes–corporate tax and Pay As You Earn (PAYE).

Also the government privatisation in the financial sector was wisely since it retains some shares in NMB, NBC and some banks still retain a hundred per cent ownership– TPB Bank, Twiga, TIB to mention a few. However, in mining sector the government was not wise. It gave up all its natural resources to investors and in return gets merely tax returns.

Currently, a topic of town is gold sand concentrates. And the debate is the country is robbed nakedly. The actual fact is the country is not robbed rather gave away the natural resources to investors at will, thanks to our laws and regulations.

However, the government acted smart recently and introduced a law that forced miners and telecoms to offload some of their share to the public–telecoms 25 per cent and miners 30 per cent. The laws are Electronic and Postal Communications Act of 2010 and Mining Regulations 2017, which states that all mining companies with special mining licenses (SML) must go public by 23rd August 2017.

At least the government now wants those firms to be owned by wananchi. This is a good move but the best way is the government to have a seat on the board of directors. This is a best chance to have a member at the boards of these mining firms and telecoms.

This way it will enable the government to have a first-hand information regarding companies. In late 2000s, Barrick Mine established a company to look for its interest in Africa. They named it Acacia Mining. Lately the firm, Acacia, was listed in London Stock Exchange (LSE) and cross listed to Dar es Salaam Stock Exchange (DSE). The priority was given to Tanzanians.

But the subscription was poorly subscribed. Stockbrokers, then, advised the government to buy those shares enough to be in the board of directors or warehousing them and sell to locals later.

The government simply said it has withdrawn out of businesses and let private sector and individuals do the buying. Good but the country lost a chance of sitting at Acacia board. Nevertheless, again these companies are supposed to offload their share to public through listing on DSE.

Yes, private sector and individuals will buy those share but not enough to be on board of directors. The best point is for the government to at least make sure buy up to 20 per cent and have a chance to seat on the directors’ board. There are two advantages on this.

One is to increase government revenues through its share and, second knowing the company strategies, plans, and financials at the board level. The government could raise fund through bonds and buy those shares.

Paying back the bond could be through dividends. For instance, Stamico– State Mining Company– could be given the task of controlling the government stakes in the mining sector.

Currently, Stamico is doing the same controlling government share of Tanzanite One–actually some of its mine engineers are working at the mine in Mirerani. Also on telecoms Tanzania Communications Regulatory Authority (TCRA) could handle government shares form telecoms.

TCRA could use some of its revenues to buy those shares. Another way is to ask pension funds to invest in that area instead of letting them venture into manufacturing sector which history told us the country failed during ujamaa–socialism, era.

Government buying mining and telecom firm shares would also assists the current initial public offers form being undersubscribed. The firms which are supposed to be listed are many.

And the public does not have the financial muscles to handle all those IPO.

The recently ended Vodacom IPO failed to raise the required amount in the first six weeks. Vodacom had to apply for extension. Vodacom is the beginning of listing biggest four out of 50 plus tele-firms.

The government should look at these opportunity and grab it with both hands in order to increase its watchdog in the mining and telecoms sectors.

Regardless of what you are mining in Uganda, access and connections to the ruling elites will help protect your investments, a new report by Global Witness reveals.

The extractives industry watchdog group, based in London also says there is ‘massive corruption’ at Uganda’s Directorate of Geological Survey and Mines (DGSM).

The report was released yesterday, Monday after an 18-month investigation into activities of Directorate of Geological Survey and Mines housed under the Ministry of Energy and Mineral Development. The 37-page report in a chapter focuses on the Africa Gold Refinery.

In the case of Africa Gold Refinery, the report says businessmen, including a former government minister, Richard Kaijuka and Barnabas Taremwa the brother-in-law to Gen Salim Saleh, have been processing and exporting hundreds of millions of dollars’ worth of gold.

The report suspects the mentioned individuals to be getting gold from the Democratic Republic of Congo (DRC), South Sudan, as well as Uganda, paying little tax in the process.

The report says in one of the many examples of legal but exploitative tax avoidance, African Gold Refinery (AGR), whose employees have close links to top Uganda government officials, declared exports of gold worth over $ 200 million but paid only half a million dollars in tax.

Taremwa is quoted by the report to have revealed how he helped arrange the tax exemptions for AGR and setup supply routes for gold. AGR, a 15-million-dollar refinery located in Entebbe, was early this year launched by President Yoweri Museveni.

The refinery is considered the second largest in sub-Saharan Africa after the one operating in Johannesburg, South Africa. Tony Goetz, the AGR chief executive director, could not be reached for a comment about the Global Witness report.

Bank of Uganda data indicates annual gold exports fluctuated between zero to just about $40 million in the period between mid-2009 and mid-2015. The exports, however, later rose to $204 million in the financial year ended in July 2016.

ROT IN DIRECTORATE

The Global Witness report exposes incidents where employees at the Directorate of Geological Survey and Mines have been setting up private companies to cash in on mineral licenses

It says corruption in the Mines Department is systemic and goes from some junior officials all the way to the top. Global Witness says it has discovered that it is routine for investors to pay certain Directorate employees a fee to ensure that mining applications meet all requirements.

The report gives an example of Flemish Investments Limited to illustrate how the Directorate employees can potentially exploit their public positions to private companies’ advantage.

It says two of Flemish Investments former directors held positions at the Directorate of Geological Survey and Mines at the time Flemish was applying for, and was granted, mining exploration licenses.

It says Flemish Investments acquired and entered into agreements to sell at least 21 mining licenses in two deals worth hundreds of thousands of dollars between 2007 and 2013.

Zachary Baguma, the principal geologist at Directorate of Geological Survey and Mines, was simultaneously employed as a director at Flemish during most of this period.

Baguma according to the report resigned in December 2011, handing over the directorship to Joshua T. Tuhumwire, who had previously been a commissioner at the Directorate between April 1980 and June 2010.

Global Witness said some exploration licenses had been granted in protected wildlife areas, including in Bwindi national park which has the largest remaining mountain gorillas.

George Boden, the team leader at Global Witness in a statement said: “This evidence is damning – Uganda’s mining sector is built on a parallel economy that strongly favours abusive companies and corrupt elites over its people and environment. The appalling mismanagement of the sector will alarm investors, human rights advocates and environmental campaigners alike.”

URN tried without success to seek comment from Energy Minister, Irene Muloni whose known phones were unavailable. A secretary at her office said the minister was in Entebbe for a meeting. State Minister for Minerals, Peter Lokeris could also not be reached on phone.

URN

By Ali Twaha

Cabinet is looking into a proposal to have new monthly minimum wage for workers pegged at Shs 136,000.This is expected to end the apparent exploitation low-end workers, including domestic workers and security who earn as little as Shs 50,000 per month.

Minimum wage is the lowest amount a worker can legally be paid for his/her work. Chris Kanya, the chairperson of the minimum wage advisory board at the ministry of gender, said:

“The board took stock of existing literature for and against adoption of minimum wages in developing and developed countries. Given the extent of the informal sector, the board has recommended a single national minimum wage for Uganda of Shs 136,000 per month.”

In July 2015, cabinet approved the appointment of the minimum wages advisory board, to study and advise government on the feasibility of fixing a minimum wage and what form the minimum wage should take.

The board members include Chris Kanya as chairperson, Milton Turyasiima representing government. Juliet Nazziwa, Fred Wapakhabulo and Robert Namawa member representing employers while Hon Joram Bruno Pajobo and Kusasira Dinah represented workers.

President Museveni has on several occasions cautioned trade unions against intimidating investors over workers’ minimum wage and unionization.

The president may not give a green light to their suggestions for minimum wage as he thinks it chases away investors. High levels of unemployment in the country mean that employers can afford to pay workers peanuts. Minumum wage policy could force them to take on fewer employees – exacerbating the problem.

Proponents, however, say the move would improve productivity of workers.

Dar es Salaam — Halotel Tanzania is currently one of the fastest growing telecommunication companies in the country and its management believes the expansion is purely a result of its business strategy of focusing on the poor communities.

Going by Tanzania Communications Regulatory Authority (TCRA) figures, Halotel – which started its operations in the country two years ago – has managed to register a total of 3.5 million voice subscribers during the period.

Until March 31, 2017, the two-year old company commanded a subscriber market share of nine per cent, outsmarting Zantel and Tanzania Telecommunication Company Limited – which have existed for over a decade – and Smart.

Halotel is now in the fourth position behind market leader, Vodacom, Tigo and Airtel.

“Basically, our growth is anchored in our strategy of focusing on poor rural communities. We also bank on the hard working spirit of our people,” the managing director, Le Van Dai, told The Citizen in an interview last week.

Halotel plans to invest $1.7 billion in Tanzania and latest updates show that at least $700 million of the planned investment has already been injected into the economy.

With the investment Halotel now covers 95 per cent of Tanzania. “Our network is now available in at least 3000 villages that did not receive any telecommunication signal before we came,” he said.

At a time when telecommunication companies are increasingly focusing on mobile money and data, Halotel says it is taking the challenge and would invest accordingly.

“Ours is a fast changing industry. If you operate for six months without investing more cash, consider yourself gone. Your competitors will invest in issues that matter during that particular time and outwit you. We pay attention to what is happening in the market,” he said.

Its mobile money (Halopesa) and data platforms are already active. The focus, he said, is now much on how to bringing added services to its Halopesa products.

“We have a comprehensive strategy with our Halopesa strategy which goes in line with the government’s wider financial inclusion scheme,” he said, adding that in partnership with other financial institutions, the focus now is to see clients getting loans through Halopesa.

Network expansion

A few weeks ago, Halotel announced that it would inject $100 million (about Sh223 billion on the prevailing exchange rate) in network expansion and service improvement in the move to grab an increased pie of both data and voice communication market.

It said that the aim would be ensure that it increases the number of its active Sim cards in the market to seven million by the end of this year.

By Jane Nyingi

The Ethiopian government has blocked mobile internet access, saying it wants to prevent exam leaks. Ethiopia has a record of censoring the country’s internet.

The nationwide mobile internet blackout started on Tuesday. Ethiopia’s internet service is entirely in the hands of Ethio Telecom, the state-owned telecom provider. It’s the third time within a year that Ethio Telecom has taken such action.

According to Ethiopian blogger Danel Birhane, the blackout has left very few companies and organizations online – only the ones that have alternative means of connectivity such as satellite communication. The capital, Addis Ababa, is home to the African Union and the UN’s Economic Commission for Africa headquarters.

Officials at both institutions said their internet was cut off but later returned. However, on Thursday afternoon most Ethiopians were still unable to communicate. “It’s not only mobile internet services that have been cut off but even landline. I cannot even monitor my own website, social media platforms or check emails; it’s really complicated,” Birhane said in an interview with DW.

According to internet giant Google, preliminary data suggested that there was indeed a big drop in Ethiopian internet traffic to its services from Wednesday afternoon. Birhane said the cut-off was unnecessary and violated the digital rights of Ethiopians. “Internet cafes have been closed. Sometimes I feel like we are 15 years back as a country. Something needs to be done,” he said.

Ethiopia has been censoring its internet for more than a decade, and social media sites like Facebook and Twitter have been blocked since unrest last year. Just last month, an Ethiopian court sentenced opposition politician Yonatan Tesfaye to six and a half years in prison for allegedly criticizing the government through his Facebook posts.

Ethiopia, which has one of the lowest internet and mobile connectivity rates in the world, was among the first countries to censor the internet to curtail political protests. Since November 2015, more than 500 anti-government protestors have been killed and thousands of others arrested while demanding land reform and an end to human rights violations.

Last year, activists leaked the papers for the country’s 12th grade national exams and called for the postponement of the exams due to a school shutdown in the regional state of Oromia. Mohammed Negash of DW’s Amharic service said it appeared the government had taken preventive measures to avoid a recurrence of the incident. Negash said he was hopeful it was only a temporary measure and that things would return to normal once the exams were over.

The government, through its public relations director in the Office for Government Communications Affairs, Mohammed Seid, said the move was ‘proactive.’ Speaking to Reuters, Seid said: “We want our students to concentrate and be free of the psychological pressure and distractions that this brings.”

About 1.2 million students are currently taking part in grade 10 national exams, with another 288,000 preparing for the grade 12 university entrance exams that will take place next week. Algeria’s government took a similar step in June 2016 when it blocked social media networks in order to curb cheating in secondary school exams.

PRESS RELEASE

Senate President, Dr. Abubakar Bukola Saraki, on Friday, listed steps that need to be taken to achieve energy security in the country that would lead to safe environment and uplift the social economic wellbeing of the people.

Saraki gave the recommendations in his speech at a one day workshop on the State of Energy Security in Nigeria, organized by the Konrad Adenauer Stiftung (KAS) climate policy and energy security programme for sub-Saharan Africa in Lagos.

He said that the country must look inwards to provide the required capital to invest in energy infrastructure by reforming the administration of current major source of revenue, improving other revenue generating sectors and instituting an economic diversification framework that could initiate a stepwise transition to a green economic development pathway.

Represented by his Chief of Staff, Hakeem Baba Ahmed, the Senate President, said it is key for the country to deepen strategic partnerships with countries that have more experience and resources to build capacity for policy coherence and technology transfer in order to generate made in Nigeria energy access innovations to grow the Naira.

He said while the 8th National Assembly firmly holds that the supply of adequate and affordable energy mix is essential, it should be a complimentary means to achieve energy security.

Saraki, according to a statement by his Chief Press Secretary, Sanni Onogu, said: “Nigeria must deepen strategic partnerships with countries that have more experience and resources to build our capacity for policy coherence and technology transfer to generate made in Nigeria energy access innovations to grow the Naira.

“The 8th National Assembly and the Senate under my leadership believes that the supply of adequate and affordable energy mix is essential in the 21st century, and there cannot be any pretense about this.

“But it should be a complimentary means to achieve energy security because energy security can only be achieved through adequate investments that are coherent and consistent.

“Looking inwards to provide the required capital to invest in energy infrastructure means (1) reforming the administration of our current major source of revenue, (2) improving other revenue generating sectors and (3) instituting an economic diversification framework that could initiate a stepwise transition to a green economic development pathway. I believe that this is the best way to go if we truly want to achieve sustainable energy security in Nigeria,” he said.

He further stated that since revenue derived from oil is highly volatile, fixing gaps leading to revenue leakages in the petroleum industry need to be addressed before implementing any policy for energy sufficiency and sustainability.

He said that the passage of the Petroleum Industry Governance Bill (PIGB) by the 8th Senate is meant to reform the oil industry and make it more revenue efficient and investment friendly.

“Nigeria’s mono-economic revenue profile derived from oil is highly volatile as it depends on global oil price shocks thereby affecting government budgetary framework and by extension, the entire economy,” Saraki said. “Therefore, fixing the lacuna in the oil and gas sector have to be tackled first before implementing any policy frameworks and reforms that can give a robust energy base for the nation.

“As a result, last week Thursday, the 8th Senate made history by breaking a 17 years jinx by passing the first part of the Petroleum Industry Governance Bill for the reform of the petroleum industry.

“The bill established a framework for the creation of commercially oriented and profit-driven petroleum entities that fosters a conducive business environment for the petroleum industry operations that ensures value addition, promote transparency and accountability in the administration of petroleum resources of Nigeria.

“The bill applies to the rights, interests, obligations and liabilities of the petroleum industry in Nigeria and establishes a regulatory commission, the Ministry of Petroleum Incorporated, the National Petroleum Company, the Nigeria Asset Management Company and a Fund which shall defray expenditures of the commission,” he said.

The Senate President stated that if a village of less than 10000 inhabitants in Feldheim can cooperate to achieve 100 per cent renewable energy supply, states in Nigeria can replicate the feet by partnering with the private sector.

He said that his vision is for the country to liberalize the energy situation in such a way that all segments of the populace can have uninterrupted access to power to support and uplift their social, economic and educational wellbeing.

He said: “In March this year, I visited the 100% Renewable energy village of Feldheim near Berlin and was impressed by the fact that a small village of less than 1000 people was able to form an energy cooperative that generate energy from renewable sources such that surpluses are sold to the national grid. That experience was an eye-opener for my delegation that if a small village in Germany can develop such an energy model, why can’t one state in Nigeria do it in partnership with the private sector?

“The 8th National Assembly is working hard to pass the necessary laws to achieve energy security and we will continue to do this with effective support from partners like everyone in this room.

“We acknowledge that in order to fundamentally create a robust and secure energy base, strategic and deliberate government policy both short and long terms that will guarantee the present and future energy needs is necessary.

“Together we can help liberalize the energy situation in Nigeria in such a way that the rural woman can cook with a clean cookstove and fuel; the school pupil can wake up at night and have light to do his/her home-work; the farmer can power coolers to preserve his/her milk and prevent post-harvest losses; the barber and hair-dresser can make more money with regular energy access; the industrialist will no longer want to close shop and move to Ghana,” he said.

END

Signed

Sanni Onogu

Chief Press Secretary to the Senate President

By Alawi Masare

Dodoma — The government plans to spend Sh9.46 trillion on servicing the national debt, including paying contributions to social security funds in the next financial year, Finance and Planning minister Philip Mpango said as he tabled his ministry’s budget yesterday.

In the current financial year, the government set aside Sh8 trillion for the same purpose and up to the end of March, Sh6.5 trillion or 82 per cent of the approved budget had been released.

Dr Mpango tabled his budget asking the Parliament to approve Sh11.75 trillion for the ministry and its institutions.

He also said the national debt was sustainable even as MPs warned the government over the growing debt, especially due to its interest.

The National Audit Office will get Sh61.8 billion for recurrent expenditure with Sh44.5 billion being for operational charges.

The office will also get Sh11.8 billion for development expenditure compared to Sh12.2 billion set for the current budget.

In the current financial year, the government approved only Sh32.3 billion for recurrent expenditure of the audit office with just Sh18.5 billion set for operational costs.

The reduced budget raised fears that the Controller and Auditor General (CAG) would not be in a better position to audit development projects.

However, this time the government has almost doubled the recurrent expenditure for the CAG.

MPs speak out

Some MPs said the government should take precautionary measures over managing the national debt despite the government’s stance that it was sustainable.

Mr Peter Serukamba (Kigoma North-CCM) said the government should consider borrowing under a fixed interest arrangement to avoid the swelling of the national debt. “Our national debt is not sustainable if you measure it in terms of revenue collection. The government must also consider paying the domestic debt to help pension funds operate smoothly. I know the government has a good intention of consolidating the pension funds, but it must make sure it pays debts before joining them together,” he said.