Recently, the EAC countries have published their 2014/2015 budgets. All countries plan to focus on infrastructure development and local trade and business promotion.
In Rwanda, the government plans to spend RwF 1.75 trillion in the upcoming fiscal year. 38% of the budget, which is themed “Infrastructure development to accelerate export growth”, is funded through external loans and grants. Priority areas of the budget include energy, agriculture, export promotion, urbanization & rural settlement, employment programs & skills development including TVET, social protection and promotion of green economy. 10% of the budget will be spent to promote productivity and youth employment. The budget is projected to close with an overall deficit of RwF 177.2 billion.
The Ugandan government is also emphasizing investment in the infrastructure sector, planning to spend Shs 75 billion of its total budget of UgSh 14 trillion for road construction and rehabilitation. The strategy is built on four key interventions: improving the business climate through infrastructure investment while maintaining peace, security and macro-economic stability; leveraging government assistance for the agricultural sector, tourism, industries and services; improving education, health services and access to water; strengthening institutional governance, accountability and transparency. Of the total budget, UgSh10.1 trillion will come from domestic revenues. The projected deficit amounts to 821 billion UgSh.
Kenya presented the biggest budget in the region (Ksh 1.77 trillion), focusing on infrastructure development, security, the promotion of commercial agriculture, entrepreneurship and a conducive business environment, education, health services, social protection. 86.3 % of the presented budget will be covered by domestic revenues. The largest share of the budget goes to education (27.3%), followed by energy, infrastructure and ICTs (22,6%). Health and agriculture/ rural and urban development have only been allocated about 5 % of the budget respectively. The predicted deficit equals about 342.4 billion Ksh.
Tanzania announced a TzSh19.5 trillion budget for the 2014/15 financial year, aiming to improve people’s lives and expand infrastructure. The government intends to reduce the cost of living and tax exemptions; improve social services, roads, access to energy, irrigation; create employment opportunities and enhance good governance. The biggest chunk of the budget goes to education (3.456 trillion), followed by transportation infrastructure (2.109 trillion) and health (1.588 trillion). Yet, compared to the previous fiscal year, the budget for the health sector has been cut by approximately 22% and the education budget by appr. 5 %. About 15 % of the budget will be covered by external grants and concessional loans. The predicted deficit equals about 3.8 trillion TzSh.
(Burundi’s budget reading is not aligned with the other EAC members’ readings.)
What do you think of the budget planning of the governments? Are they setting the right priorities? Are there any particular sectors that should receive more funding?
The UN Member States had committed to reach the following Millennium Development Goals by 2015:
- To eradicate extreme poverty and hunger
- To achieve universal primary education
- To promote gender equality and empower women
- To reduce child mortality
- To improve maternal health
- To combat HIV/AIDS, malaria, and other diseases
- To ensure environmental sustainability
- To develop a global partnership for development.
Do you think their budget planning will allow the EAC countries to get closer to achieving these goals?
All countries are expected to close their budget with a high deficit. Do you think this is necessary to invest in future development or are governments taking too many risks and making their countries even more vulnerable and dependent on foreign sources of funding?
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