EAC Economies Project Growth, Focus Efforts on Transport Sector

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In short
In Kenya, East Africa’s largest economy, Henry Rotich the Cabinet Secretary unveiled planned expenditure of US $ 18billion. Domestic resources are expected to finance more than 80percent of the budget whose highlights include funding for new roads and the Standard Gauge Railway. Rotich described this as a move to boost the business environment in Kenya.

East African Economies will over the next financial year focus efforts on transport infrastructure and growing revenues to finance rising expenditure. This is reflected in the budget estimates for the FY 2014-2015 presented yesterday by all countries with the exception of Burundi.

Uganda’s budget is the third largest in the East African bloc at an estimated US $ 6billion. Its focuses on improving road infrastructure, fast-tracking the construction of Karuma power dam and increased expenditure on Security. In the region, Uganda eliminated some exemptions and also increased taxes on fuel, sugar and sports betting.

In Kenya, East Africa’s largest economy, Henry Rotich the Cabinet Secretary unveiled planned expenditure of US $ 18billion. Domestic resources are expected to finance more than 80percent of the budget whose highlights include funding for new roads and the Standard Gauge Railway. Rotich described this as a move to boost the business environment in Kenya.

There was also an allocation to improve irrigation across the country in-order to improve farm yields and reduce the poverty levels in the country. Rotich said that enhancing infrastructure in the country would create more jobs which in-turn would contribute to economic growth.

Projected economic growth for Kenya is at 6.4percent. The country will also borrow from the domestic market by issuing treasury bills and bonds. Kenya is currently facing serious security challenges with a spate of grenade attacks and shootings mostly in Mombasa. It is therefore not surprising that the Kenyan government allocated US $ 2billion for the recruitment of police officers and upgrading security equipment.

In Tanzania, the budget focused on infrastructure, energy, education and agriculture. The government plans to spend about US $ 14.5billion in 2014/15. East Africa’s second largest economy will mostly finance the budget through increasing revenues on one hand, domestic borrowing and concessional loans from international lenders.

A key highlight from Tanzania was the planned expenditure on energy and mining, specifically targeting the completion of natural gas pipeline. Tanzania has discovered a significant amount of gas, some of which will be used to generate electricity. Tanzania has projected the highest economic growth in East Africa at an ambitious 7.2percent.

Rwanda unveiled a US $ 2.5billion expenditure plan for the next financial year. The budget will be mostly funded by domestic revenues as the country continues to wean-off foreign aid. Investment in infrastructure, especially energy generation and rural development projects were tagged as priorities from Rwanda.

The expenditure also aims at increasing the country’s exports by boosting the mining sector. Rwanda will also issue treasury bills and bonds. Rwanda also expects some funding from donors as its economic transformation and poverty reduction has impressed many.

Projected economic growth for Rwanda in 2014/15 is expected to be 6.7percent