Budget Speeches in East Africa

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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:

  1. To eradicate extreme poverty and hunger
  2. To achieve universal primary education
  3. To promote gender equality and empower women
  4. To reduce child mortality
  5. To improve maternal health
  6. To combat HIV/AIDS, malaria, and other diseases
  7. To ensure environmental sustainability
  8. 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?

***************************** Let us debate *****************************************

Sources:

http://allafrica.com/stories/201406130290.html

http://www.statehouse.go.ug/media/news/2014/06/12/budget-speech-financial-year-201415-delivered-meeting-4th-session-9th-parliame

http://www.statehouse.go.ug/media/news/2014/06/12/20142015-budget-poised-boost-infrastructure-sector

http://www.thecitizen.co.tz/magazine/success/education-budget/-/1843788/2351536/-/2kmmi3/-/index.html

http://www.minecofin.gov.rw/index.php?id=123&tx_ttnews[year]=2014&tx_ttnews[month]=06&tx_ttnews[day]=12&tx_ttnews[tt_news]=242&cHash=8f8d32ff9d2568da897550cab75da857

http://www.treasury.go.ke/index.php/resource-center/cat_view/79-budget-/144-budget-2014

 

20 Comments

  1. Of the four budgets, the Kenyan budget shows more wisdom in it. They spend more in education meaning they want to build human capital which is the backbone of Malaysian triumph. They want the people to be the engine of development. After empowering the people they want to provide them with reliable energy for production and infrastructure to easily access raw materials and the market! isn’t that brilliant?

    As for Tanzania who also spends more on education, its a pity that though the currently budget failed to revamp the education sector, they have gone further to cut down its budget by 5%, is their sense in this?

    • I think Kenyans budget should focus more on security issues since the current situations is not good for their economy to grow, since the terrorist attacks in Mombasa and Nairobi are still a big problems for them.

  2. If the reflection of these budget should focus on reach of the millinium Development goals, accually it has failed!Dependence of external donors,loans and grands is still a big challenge to our EAC countries budget. Also misuse of resources and corruption is still disaster to our governments,ie. Tanzania government decrealed 30% of the budget has been used inappropriately! Does the government shows any commitment to deal with this situation? The answer is a big NO!!
    The Kenyan budget shows some crical and current areas to focus.eg. education and ICT,this is is a brriant one, even if implementation will be another case ..it seems others do not know what is going on, in this global and competive world!!

  3. TZ budget is unrealistic, its a just a mere big figure while the actual funding from internal sources is little compared to approved budget. Tax base is still the same years and years! No new innovative strategies of expanding Tax base while the country faces billions of illicit financial flows each year! We should expect continued poverty in rural areas!

  4. EAC Countries are still facing with dependency syndrome, if you look at our budgets, dependence on external loans is something to be feared since the national debt will increase in every financial year.

    I dont think that the priorities in our budgets has been given enough attention, we have to invest in educating our people in-hand with employment creation.

    In case of tax exemption, Tanzania move on tax exemption will not benefit the poorer, only the big fish will benefit form it. Also, in our experience Big tycoon are the ones who escape taxes by using corruption.

    Inline with MDGS our budgets will not lift us from extreme poverty especially income poverty; due to external dependency for loans, our national debt will increase and consequently the so-called Millennium Development Goal will remain day dream to be achieved.

    Otherwise the EAC countries should dream development out of depending on external loans.

  5. I think EAC countries are faced with a challenge of poor performing productive sectors particularly the industrial sector. most of the products are imports our exports has continued to be raw materials. this can not improve people’s livelihood since the economy is very fragile and depends on service sector that does not produce good, not even jobs.

    The reason why we do not make sense of economic integration is because of not being strategic, if you can not produce to even cutter for your local market why invest in infrastructure for external markets?

  6. Education, education education, all the EAC countries need massive investments in education sector, without education the region will not move. On the side of Kenya, security is very crucial, they have to invest on security software, in this case I am referring to Intelligence, we in the region do have enough hardware what we miss dearly is the software – the technical know-how to “smell” or detect the ill intentions in advance before its execution.

  7. So, finally finished reading Kenyan budget 2014/2015 and my worry is on the source of funding.
    The allocations are quite straight forward (though biased a bit), but trouble arises on Revenue sources coz according to Cabinet Secretary Rotich we are supposed to raise internally Ksh. 1.18 trillion but he only indicated Import duty Ksh.77.7b + Railway Development Levy Ksh22.9b + Excise duty Ksh.119.8b + Investment income Ksh17.4b + Appropriation in Aid Ksh71.2b + VAT Ksh267.1 = Total Ksh576.1billion.

    Also, we are supposed to borrow $4.8billion (417.6billion); already raised $2b thru Eurobond and we planning to raise the rest through Sukuk bonds (Sharia compliant bonds) and Samurai bonds in Asian market

    So, now we know where Ksh.993.7billion is supposed to come from, but where is the remaining Ksh775.3billion coming from??? The budget being Ksh.1.769trillion.

    I haven’t even deducted the Ksh.2.4billion taxes KRA is going to forfeit to boost local tourism or the plummeting quarterly revenue collection… something not adding up and its serious.

  8. Dear Friends,

    Greetings from the Land of a Thousand Hills and a Million Smiles!!

    I must confess it’s been quite a long time, thanks to Henry for keeping the forum active. As far a national budgets are concerned, Rwanda’s 2014/2015 National Budget focused on boosting the energy sector. Rwf148.6 billion was allocated to electricity generation, transmission and distribution, alternative sources of energy promotion and energy efficiency and supply security. The target is to see 563MW of energy realized by 2017 in order to reduce the country’s electricity deficit.

    From a business perspective, this move is going to spur industrial growth and reduce importation (big challenge to local industries here). The second phase of Rwanda’s Economic Development and Poverty Reduction Strategy (EDPRS II) focuses on a private sector –led economy. With more efforts towards curbing the energy deficit, the cost of production will perhaps be brought down due to availability of affordable energy….Keeping our fingers crossed for next financial year to evaluate the impact.

    Otherwise, I hope you are all doing fine! Cheers!!!

  9. @Asenga, security issues in KENYA is a politically constructed matter, so it should be resolved politically by Kenyans. Involving others EAC member sates on the saga of war on terror in Kenya, on my opinion will provoke the security dilemma more than ever. However EAC has countries has a good way to pass in a joint manner to resolve their economic matters out of depending from external loans and grants.

    If EAC federation will work effectively the issues of priorities with their budget should be jointly planned, eg infrastructures, communication and the said security issues.

    Kenya and Uganda will perform well in the coming financial yr, but to Tanzania I still see a question mark on our budget especially when t comes to the issues of tax exemption.

  10. I am positive about the country’s focus on the private sector to spur development.
    I believe that one important factor for an economy to thrive there should be emphasis on facilitating the private sector.
    More so, energy is an important infrastructure towards facilitating industrialisation and productivity coupled with employment creation which steer economic development.
    All the best and wish you prosperity

  11. Hello guys,

    I’ve a feeling that we need to see ways into which we can influence the budget preparation process by communicating our line of priorities.

    As much as I agree that its important to critically understand and analyze our countries’ annual budget we should also not forget that it would be important to contribute our views before they are presented.

    We should at the moment try to work closely with our constituents (youth) in addressing security and conflict concerns in the region. As you all understand, it is a fact that a very good percentage of terrorists and warlords are basically young people. The primary cause is unemployment against the growing population.

    Lets work round the clock to define practical solutions to these challenges to bring relative calm in our countries and neighborhoods. We cannot afford to live this role to the government since its actually young people involved.

    Greetings from Tanzania

    • I agree with you Mr. Okello,

      However Just for your information, governments are aware of the issue of unemployment amongst the youth. Governments are also emphasizing a lot about Entrepreneurship (of which I know that Rose K is pro) but there is less education about the financial management skills and knowledge necessary for entrepreneur.

      I lot of youth funds and youth develop aid is present to the public for use, however very many youth find it unnecessary to comply with the controls and qualifications set up. I then wonder which kind of Entrepreneurs that can make then.
      As we advocate for Entrepreneurship, more emphasis should be given to Strategic, Financial Management, Internal Control System Skill and then leadership. So many people think that entrepreneurship is all about General Leadership skill. A big NO.” We need to go some extra miles.

      We need to sing the song of Un-employment and entrepreneurship with rather a deeper strategy and analysis and mere talking about it with political arguments.

  12. As much as we can afford to fund most of our budgets from local revenue, there remains little emphasis on the need to enhance micro-economic condition in the East African countries.

    Micro-economics has a direct impact on the ordinary person, and yet macro-economics may give a false impression of the performance of the economy based on broad indicators such as GDP, inflation and unemployment. Our budgets are aimed at improving macro-economics.

    Our budgets should have focused on improving disposal income of the people to enhance demand, which will in turn grow supply-production of goods (micro-economics). Unless, a country expands demand among a wider spectrum of the population, then growth will be enjoyed by a few people(INCOME INEQUALITY).

    Contrary, in Uganda, micro-economic growth was weakened when the demand power of the ordinary person was reduced by slapping new taxes on popular items such as kerosene, sugar, mobile transfers, cooking gas, computers, private schools among others.

    Now, why would I heighten my demand for those products when I know they will make me poorer? remember if I don’t buy those products,then their supply will reduce and so will the revenue generated from them.

    I BELIEVE THE NEXT BUDGETS SHOULD BE PRO-PEOPLE AND FUEL
    MICRO-ECONOMIC GROWTH.

  13. Dear colleagues,

    On the topic at hand,I associate myself with most of the submissions,for the Ugandan context the budget thing is just an extension of the previous years and we eagerly waiting to see that government leaves up to Its budget plan/promises.

    Government has put money into the education sector by increasing teachers salaries and paying attention to vocational training this if handled well will improve human resource.am also agreeable to the issue of donor cuts,its a big step forward because as you are well aware most of that money has always been embezzled by corrupt government officials leading to unending court litigation,forget not the old saying that ‘old habits die hard’we have several other sources where income can be realised for example improving on the agricultural sector,infrastructural development which have been considered as priority areas for this year’s budget,further new taxes have been introduced and
    old ones revised all these if government puts more stringent measures to curb corruption can be a good pool of realising more income,the national budget is a plan to raise and allocate resources,in my view government should stop forum shopping for donor funds,it should tread carefully into accumulating more debt.

    Another concern is the issue Of monitoring income of the so called investors,we have a huge inflow of them but are neither monitored by government nor URA,surprisingly several are in the arcades operating retail shops,some hawking mobile phones from one street to another but all these were ushered in as investors,my major concern here is that there incomes should be monitored.

    Again no mention was made of the youth venture fund where huge sums of money were invested one wonders whether it was meant to benefit a particular youth group who had their feel of the thing and it thereafter died a natural death.
    At the face of it ,its so cosmetic.

  14. The Kenya budget for the financial year 2014/2015 stand at 1.8 trillion of which 87 percent is financed from domestic resources and 13 percent from foreign sources.

    Life is tough for Kenyans who must raise the huge amount through heavy taxes as outlined in the national budget estimates.

    The proposed tax measures are likely to complicate the aspiration of most Kenyans whose biggest is the high cost of living that has been worsened in part by the introduction of VAT on basic commodities.

    Ministerial Recurrent Expenditure for the National Government is estimated at Ksh.654.1 billion while Development Expenditure is estimated at 476.4 billion.

  15. The big question among African Countries and for us in Kenya is? As national and County governments expand their tax nets is, are the services provided matching the same.

    What are governments doing to help micro traders who are the back born of our economies to increase their income.

    What amount of investments are we putting in food security, water for both irrigation and domestic consumption, education and employment opportunities. Lastly how are we promoting the concept of Africa for Africa by buying and selling among one another.

    What kind of partnerships are we engaging in to utilise our natural resources for our own benefit as Africans.

    • As much as we can afford to fund most of our budgets from local revenue, there remains little emphasis on the need to enhance micro-economic condition in the East African countries.

      Micro-economics has a direct impact on the ordinary person, and yet macro-economics may give a false impression of the performance of the economy based on broad indicators such as GDP, inflation and unemployment. Our budgets are aimed at improving macro-economics.

      Our budgets should have focused on improving disposal income of the people to enhance demand, which will in turn grow supply-production of goods (micro-economics). Unless, a country expands demand among a wider spectrum of the population, then growth will be enjoyed by a few people(INCOME INEQUALITY).

      Contrary, in Uganda, micro-economic growth was weakened when the demand power of the ordinary person was reduced by slapping new taxes on popular items such as kerosene, sugar, mobile transfers, cooking gas, computers, private schools among others.

      Now, why would I heighten my demand for those products when I know they will make me poorer? remember if I don’t buy those products,then their supply will reduce and so will the revenue generated from them.

      I BELIEVE THE NEXT BUDGETS SHOULD BE PRO-PEOPLE AND FUEL
      MICRO-ECONOMIC GROWTH.

  16. Infrastructure and power were among the winners in this financial year’s East Africa budgets.If there is one thing most East Africa Community partner states agree,on is infrastructural development.

    States spending’s go towards development of their respective extractive industries sector. Higher spending on infrastructure will require EAC governments to boost borrowing.

    East Africa budgets are closely watched for attempts at fiscal consolidation amid hydrocarbon discovery across the region and there is need to control deficits and debt accumulation.Spending on infrastructure is a key theme of the budgets but close attention should also be paid to affordability.

    The EAC should therefore take remedial action to be able to tame the tide of leakages in their public payrolls and make significant savings.The ballooning wage bills make it a priority for EAC governments to identify human resource solutions and internal controls to curb the trend.

    The East Africa finance ministers delivered their governments budget speeches.It was interesting to see how statistics were thrown to east Africans in terms of expenditure and allocations.My thought was and still is-how on earth are we going to pay for this? What i didn’t hear,other than passing was how we intend to control our recurrent expenditure which continue to spiral out.

    All countries budget planning have closed with high deficit likely to mortgage the region and predispose it to the risks of dependency,vulnerability and neocolonialism.

    The millennium development goals might not be achieved because the flagships are underfunded despite EAC states having committed to achieve them by 2015

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