With the exception of Burundi, for both investors and ordinary citizens, the presentation of budgets by Uganda, Rwanda and Tanzania removed any lingering uncertainty over where economic policy in the region is headed.
There is no word from Burundi, which of late has been at best a reluctant member of the regional brotherhood.
This is however likely to be of little consequence given that for the past two years, the country has largely isolated itself from mainstream regional trade.
But for a couple of sin-taxes, the ministers were being careful not to rock the boat.
While there may be a few bumps along the path to the goal, a common thread from Dar es Salaam to Kigali is economic stimulus. The budget statements are heavy on infrastructure and social spending.
At 20 per cent of total spending, the works sector took the lion’s share of Uganda’s budget, reflecting the steep demands of the ramp up to oil production. Health and education also took huge chunks of planned spending, while agriculture, as usual, appeared to rank lower in priority.
The bulk of Rwanda’s $1.1billion development budget will fund roads, water and other key infrastructure projects.
A key question from analysts is whether it will be possible to pull off these ambitions. With the possible exception of Rwanda, which will be borrowing only 17 per cent of the budget, there was no immediate clarity on the size of the deficit in Uganda’s $8 billion budget, a significant portion of which will go to funding debt repayment.
A major question for Uganda is whether the plan will help energise an economy that, for the third year in a row, has performed below target.
Ominous also is the fact that while as a portion of GDP, domestic borrowing is going down, in absolute terms, it is increasing by nearly 50 per cent. That means commercial interest rates are unlikely to abate, as Treasuries compete with private enterprises for credit.
In Tanzania, a major concern seems to be over where resources to fund Dr Phillip Mpango’s $14 billion budget will be found.
Tanzania, like Uganda, is struggling with under-performance. Budget execution for 2016/17 was 70 per cent while grants and concessional borrowing achieved just 65 per cent.
The commodity markets are yet to fully recover, a fact that can only further undermine the country’s capacity to borrow. A major challenge for Uganda is the absence of clear linkages between the budget and poor execution of public projects.
For instance, increased domestic borrowing is incompatible with the goal of easing the credit squeeze that has out the brakes on industrial expansion since 2015.
Drought remains a near-term challenge, while there is only token funding for agriculture and irrigation in the budget. At just over half the budget, the margin is thin and domestic revenues will struggle to hit target.
Like Rwanda, which has maintained a modest expansion of the budget at just 7 per cent, what Uganda needs is austerity. That would require that any expansion in expenditure is twinned to projected growth.