A review of budgetary spend across East Africa countries from previous years shows that the infrastructure sector continues to be accorded priority due to its contribution to economic growth.

In the financial year 2014/15, an aggregate budget spend of over $7 billion (Sh678 billion) was allocated to infrastructure across East Africa (Kenya, Rwanda, Tanzania and Uganda).

Over the years, the countries have increased spend on key infrastructure with the bulk of the cash going to transport and energy sectors. ICT, education, health, water and sanitation infrastructure receive a discretionary allocation, depending on individual country programmes.

One would expect to see further increases in spend allocation to infrastructure in 2015/16 budget, to enable member states achieve development programmes. Allocation to infrastructure spend in the years 2011 – 2014 has been in the range of 19 – 25 per cent of expenditure for the East African member states.

Financing for infrastructure spend appears to be a combination of domestic revenues from tax collections and external financing.

However, non-traditional approaches are being used to supplement the more traditional methods of financing infrastructure, this has included concessional borrowing and use of external and domestic debt markets.

In addition, public private partnerships (PPPs) are increasingly being appreciated as a means of financing infrastructure projects across the region and countries are in the process of formalising laws and setting up units to manage such deals.

However, the region continues to experience slow pace in implementation of key projects due to bureaucratic hurdles in procurement, legal battles from losing bidders and non-aligned interests of regional governments.

Transport infrastructure

Transport represents the bulk of spending on infrastructure in the region at over 50 per cent of allocation. The spending on transport infrastructure has mainly been in the road and rail sectors.

Spending in the roads sector has been targeted to enable construction and upgrade of key national and intraregional roads, bridges and routine maintenance of road networks. The move is aimed at enabling trade in the country and within the region, and to ensure that key links are maintained.

Under the railway sector, there is collaboration among partner States within the East African region looking to revitalise the railway transport system.

For example, works are ongoing to upgrade the standard gauge rail to link Kenya, Uganda and Rwanda as part of the Northern Corridor, development of inland container depots and the upgrading of port and pier facilities.

Railway sector spend has largely been financed by development financing.

Energy infrastructure

Spend on energy infrastructure has been targeted towards addressing limited capacity during peak demand, system losses and weaknesses, increasing coverage to rural areas, increasing security and diversity (types) of supply within the grid.

To tackle these problems, over 25 per cent of allocation to infrastructure in country budgets has been to the energy sector in the period representing $1.5 billion —$1.8 billion (Sh145 billion- Sh174 billion) per year.

The region’s main challenge is the population’s reliance on wood fuel because it is cheaper, but comes along with the environmental degradation.

Innovative solutions are going to be required to change attitudes and drive adoption of energy options away from biomass degradation.

Other

Infrastructure spend in the other sectors has totalled 25 per cent of budgetary allocation over the years, representing $1 billion - $1.5 billion (Sh 96 billion to Sh145 billion) in spend.

The spend on other infrastructure has mostly been towards the education, health, water and sanitation and ICT sectors. Spending on infrastructure in the education sector has been targeted towards increasing access with emphasis on skills development.

This is related to construction of additional schools (primary education) and training institutions (vocational institutes and teachers’ colleges).

Spending on infrastructure in the health sector over the years has been with the aim of improving the productivity of human resource across the region with constructing of additional staff houses in lower level health facilities to minimise absenteeism and expanding health facility infrastructure at both local government and referral levels.

With a target to improve the access to safe water and sanitation, governments in East Africa have continued to allocate spend to infrastructure in the water and sanitation sectors towards these goals.

This has been through combined urban and rural expansion projects on the current water and sanitation infrastructure and allowing for new infrastructure.

There has been targeted financial support to the water and sanitation sector from development partners especially the World Bank.

Spend on ICT infrastructure has included efforts to develop and or upgrade national Internet infrastructure systems to reduce costs which should drive savings in ministries, departments and agencies across countries, while providing technology to improve the business climate, competitiveness and promote job creation, for example, through business process outsourcing centres.

Mr Legesi is a manager at Deloitte East Africa