Infrastructure projects, industrialisation take largest chunk of East Africa budgets

What you need to know:

  • Inequality. Whereas income per person has increased, inequality between rural and urban areas has risen with rural poverty rising from 22.8 per cent in 2013 to 25.8 per cent in 2017, against a marginal increase in urban poverty from 9.3 per cent to 9.4 per cent.

KAMPALA.

Meanwhile East African taxpayers should be prepared to shoulder more tax burdens as the regional governments roll out heavy-infrastructural, industrialisation and education budgets.
The four EAC member states’ (Uganda, Kenya, Tanzania and Rwanda) Finance ministers simultaneously presented their budget speeches on yesterday. However, Burundi and South Sudan the rather insecure member states did not present their budgets.
Burundi’s financial calendar starts in January while South Sudan - the newest member of the Community, has not yet synchronised its budget reading with other member countries.
Just like the previous four financial years- yet again the member states have increased their resource envelopes with major allocations going to the same sectors they allocated a huge chunk last year.
This is aimed at developing infrastructure to ease doing business, boosting the energy sector to support growing industries, education, communication and security with the aim of growing the economies that benefit all.

Resource envelopes
In Uganda, the resource envelope for the financial year 2018/19 has been increased to Shs32.7 trillion up from the Shs29 trillion that was presented in the 2017/18 financial year, indicating an 11.2 per cent increase.
Similarly, Kenya the region’s biggest economic power in the new financial year 2018/19 will spend $31b (Shs118 trillion) - which is almost four-times Uganda’s budget.
This was an increase from the $26.6b (Shs96 trillion) national budget for the financial year 2017/2018.
While Rwanda’s national purse increased in public spending of which 84 per cent will be sourced locally, on expanding the national airline RwandAir, construction of Bugesera airport and a new international airport near the capital Kigali.
Rwanda’s resource envelope for 2018/19 has increased to Rwf2.8 trillion (Shs12.5 trillion) from Rwf2.4 trillion (Shs10.7 trillion) allocated in the concluding financial 2017/18.
The region’s highly ranked nation by World Bank in easing business expects to create 200,000 jobs in the long-term.
Tanzania’s Finance minister Philip Mpango while presenting the $14.3b budget up from $14b, yesterday outlined five priority sectors that government will focus on to grow the second largest regional economy.
Mpango said the five priority sectors are establishing industries, improving business climate through the rehabilitation of infrastructure, promoting education, health and social services.

Resource allocation
The Ugandan Budget themed: Industrialisation for Job Creation and Shared Prosperity”, is expected to largely come from domestic and donor resources.
In his speech Finance Minister Matia Kasaija said the domestic revenue amounting to Shs16 trillion of which Shs15.9 trillion will be collected by Uganda Revenue Authority (URA) as tax revenue and Shs420 billion as Non-Tax Revenue.
Kasaija said: “The bold steps taken to invest in security and infrastructure development have set the stage for faster and sustained economic growth in Uganda.”
He added that the Financial Year 2018/19 Budget goes further to support areas that will deliver inclusive growth especially in Agriculture and its value chain, as this is the anchor for our quest for Industrialisation.
The Kenyan government is seeking to take measures under the ‘Agenda Four’ to boost manufacturing, enhance food security, create affordable housing and achieve universal health coverage to boost growth, create jobs and ultimately promote inclusive growth.
As a result, the government has prioritised programmes and reforms to be implemented over the next five years (2018-22) to achieve the grand plan which will also form part of the legacy of President Kenyatta’s administration.
National Treasury Cabinet Secretary Henry Rotich has extended an olive branch to the private sector to implement the mega infrastructure projects under the ‘Big Four’ agenda jointly.