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What Are In The 2018/19 East Africa Budgets? — By Mnaku Mbani

Dar es Salaam —-Article of Thursday, June 14 2018: The East African community member states are expected to table their 2018/19 budgets on Thursday.

Tanzania finance minister Phillip Mpango

The budgets for all five countries are to be read at the same time, although conflict prone Burundi and Southern Sudan might not present their budget together with other four countries.

Priorities for four obtained budget proposals of Tanzania, Uganda, Kenya and Rwanda are industries, infrastructure, energy, food security, housing, trade logistics and health.

The expectations of many East Africans are to see workable budget which will improve their lives in all life cycles.

“What we want to see in the coming budget is how East Africans government will work out to end all socio-economic challenges including extreme poverty, health challenges and food security,” said Mr. Rajab Mtaka, a school teacher in Dar es Salaam.

Mr. Mtaka said much of the budget have failed to create social impacts due to challenges of resources as many budget are mostly depending on donors and loans for implementation.

He alerted over the increased debt in Tanzania due to massive borrowing through commercial lenders, saying would turn countries into debt vicious cycles.

“We want to see the budgets being pro-poor because poverty has stuck on us, while governments are smiling as if there is nothing happening,” he said.

The major challenge facing East African countries is how they will get enough resources to finance their budget as domestic resources cannot meet all the demands incorporated in the budgets. 

Tanzania

Tanzania plans to increase spending in its budget for the fiscal year ending June 2019 from 31.71 trillion shillings (14.21 billion U.S. dollars) to 32.4 trillion shillings.

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Mr. Philip Mpango, Minister for Finance and Planning, unveiled the budget proposal when presenting to the National Assembly the proposed national development plan and budget preparations for the next fiscal year.

The major priorities of the projected budget being the construction of more industries, creation of a conducive business and investment environment, and improving the welfare and livelihoods of rural communities.

Mpango said the total proposed budget is for recurrent expenditure and development projects.

Revenues from internal sources are expected to be 22 trillion shillings, which is equivalent to 68 percent.Development partners are expected to contribute 3.6 trillion shillings, the minister stated.

The 2018/19 budget projections will be endorsed after performance analysis of the current budget implementation in the first half of 2017/18, he added.

On industries, the finance minister said priorities will be directed towards construction and improvement of the Mchuchuma and Liganga coal mines,

Mkulazi sugar project in Morogoro Region, Liquefied Natural Gas (LNG) plant in Lindi, the establishment of special economic zones, and the Kurasini industrial park.

He said the government is also determined to create a conducive environment for businesses and investment, with infrastructure such as ports, railways, and roads to be upgraded and more reliable power supply.

“We want to ensure that economic growth is felt by the ordinary people, especially those living in the rural areas. Improvements will be done on the provision of quality healthcare, education, water services, and availability of nutritional food,” said the finance minister.

According to Mpango, the government’s economic growth target for the period of between 2018/19 to 2020/2021 is estimated at 7.1 percent in 2018, compared to this year’s 7 percent. In the first half of 2017, the economy grew by 6.8 percent, he said.

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He said the increase was due to new loans directed to development projects, including construction of a Standard Gauge Railway, Strategic Cities, and Dar es Salaam Rapid Transit.

Kenya

Kenyan Treasury Cabinet Secretary Mr. Henry Rotich will have a taste of what to expect when he will releases his Sh2.4 trillion budget for 2018/19 on Thursday.

Mr. Rotich seems to be optimistic that fiscal policies put in place will support the budget which is premised on President Uhuru Kenyatta’s Big Four agenda of food security, universal health care, affordable housing and manufacturing.

“Kenya has proved to be a resilient economy. Managing 4.9 per cent growth under tough operational environment witnessed last year is commendable. I will be tabling 2018/19 budget in parliament tomorrow. We expect to go beyond our economic targets next financial year,’’ said Rotich during presentation of the proposed budget estimates.

Uganda

Uganda National Budget for FY2018/19 will be under the theme ‘Industrialization for job creation and shared prosperity’, a total budget of UGX 29.274 trillion ($9 billion) of which only UGX 12.744 trillion (43.5%) will be available for service delivery excluding budget support, debt repayments and domestic refinancing.

Rwanda Finance Minister Uzziel Ndagijimana

Paying interest rates to Local and external loan obligations is projected to be UGX 2.7 Trillion (nearly $1 billion) which is one of the largest proposed allocations in the FY2018/19 budget.

Uganda’s growing unemployment rate, trade deficit and debt equivalent to 33.8 per cent of Gross Domestic product which is considerably high, can draw the country closer to the debt trap.

Development expenditure is expected to amount to 27.9% of the total budget less than the minimum 30% threshold provided by the Public Finance Management Act 2012. The government aims to raise its revenue through collection of Tax revenue projection for FY2018/19.

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However Uganda still faces the challenge of having more revenue source hence straining the existing narrow revenue sources and the tax payers. There is need to build a stronger tax regime to improve revenue mobilization and widen the tax base.

Government plans to finance both the fiscal deficit and development expenditure using domestic sources, this will mount pressure on the domestic market in the FY2018/19.

Uganda still relies on external and domestic debt which stands at 27% of GDP, especially a high debt repayment plan with interest payments being second in allocations.

The country needs to be able to generate as much revenue as it can domestically in order to reduce debt burden and be able to finance its own development.

Rwanda

Rwanda plans to increase by 15.5% the resource granted for public expenditures during the 2018-19 fiscal year, the finance minister Uzziel Ndagijimana was quoted saying.

According to information relayed by Reuters, this amount should stand at $2.85 billion, up by more than $380 million compared to the $2.47 billion last year.

This increase in public spending will benefit many projects including the expansion of the national airlines RwandAir, the construction of Bugesera airport and a new international airport near the capital Kigali. The official indicated that 200, 000 jobs should be created in the long term.

Let’s note that the government will provide 84% of the budget while the balance will be granted by donors.

Mnaku Mbani is a Business reporter based in Dar es Salaam, Tanzania.

SOURCE: ooreporters.com


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Updated: June 15, 2018 — 10:11 am

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