East African governments have increased their annual budgets for the 2015/2016 fiscal year, with more spending directed to security and key sectors expected to drive growth.

But the ballooning spending plan for the region comes against the backdrop of faltering revenue collection and declining donor support, creating a fertile ground for increased domestic borrowing.

In Rwanda, the total budget for fiscal year 2015/16 is projected at $2.47 billion, reflecting an increase of $8.26 million, compared with the 2014/15 revised budget of $2.46 billion.

The Finance Ministry announced that Rwf882.5 billion ($1.32 billion) equivalent to 50 per cent of the total budget will finance economic transformations, rural development, employment and accountable governance.

Economic transformation projects will be allocated Rwf413 billion ($619 million)—23 per cent while rural development will be get Rwf227.9 billion ($341.8 million) — 13 per cent.

Productivity and youth employment will be allocated Rwf152 billion ($228 million) —nine per cent while the remaining Rwf89 billion ($133 million) — five per cent will go to accountable governance.

Foundational areas (education, health, public accounts, justice and sustainable development) will receive Rwf645.6 billion ($968.4 million) or 37 per cent of the total budget. Rwf240 billion ($360 million) or 14 per cent will go to service delivery and ICT promotion.

Donor funding is expected to decline to 5.7 per cent of the gross domestic product (GDP) in 2015/2016 from 7.3 per cent of GDP in 2014/15 as development partners opt to channel funds directly to specific projects and to non-governmental organisations.

READ: Rwanda in a resources, financing dilemma as aid is given directly to specific projects

According to the budget estimates released last week, Tanzania plans to spend $12.31 billion in 2015/2016 compared with the current budget of $10.87 billion.  The key feature of the country’s 2015/16 provisional spending plan is the absence of general budget support funds.

Tanzania is facing souring relations with donors, who are hesitant to open their purses over corruption allegations.

Speaking at a pre-budget presentation, MPs complained of poor implementation of the budget, saying only 50 per cent of the current budget had been achieved.

READ: Local, external borrowing to plug donor funding hole

In Uganda, MPs complained that the government proposes to increase its expenditure by 19.3 per cent to $5.9 billion from $5 billion, with the bulk of the allocation going to the Ministries of Defence, Energy and Roads.

Agriculture and social sectors such as education and health will thus suffer a decline in the percentage allocation, they said.

Budget estimates show that funding for the security sector increased by $118 million from $381.6 million on account of increased classified expenditure in South Sudan.

Allocations to the roads sector rose to $1.1 billion from $786.6 million while the budget for the energy sector grew by $313.8 million to $916 million.

Aston Kajara, the Minister of State in charge of Privatisation, said social sectors are poor at absorbing budgetary funds.

Low absorption has already affected the disbursement of donor funding from lenders like the World Bank, the African Development Bank and the European Union. Lending from these donors is expected to drop from $341.9 million to $328.9 million, mostly affecting agriculture, health and education.

READ: Low absorption costs social sectors funding

The Ugandan government is  set to increase non-concessional borrowing with   25 per cent of the budget being financed by loans from commercial institutions.

The country is attempting to reduce the pace of internal borrowing, which has crowded the private sector out of financial markets in recent years.

In Kenya, the government proposes to increase total spending for the 2015/2016 fiscal year to a massive $21.27 billion from $19.14 billion in 2014/2015.

The National Treasury has increased the allocation to the military and the police to $2.28 billion from an estimated $2 billion in the 2014/2015 fiscal year.

READ: Kenya increases budget allocation to security and energy

The police department also benefited from an additional $106.38 million while the defence and intelligence department secured an extra $170.21 million.

About $7.6 billion will be spent on development programmes (including parliament and judiciary) while ministerial expenditure will amount to $8.36 billion.

The fiscal deficit will be financed through external borrowing of $3.62 billion, domestic loan repayments ($23.4 million), National Bank of Kenya rights issue ($53.19 million) and domestic borrowing ($2.33 billion).