Concern as EAC budgets not read at the same time

Monday June 22 2020

Workers at Kenya’s Lamu port site. The East African region’s ambitious infrastructure projects have been key features in the 2020/21 budgets. PHOTO | FILE | NMG


Private sector players in the region under the umbrella body, the East African Business Council, have asked East Africa Community partner states to adhere to the Treaty requiring them to read their budgets simultaneously.

EABC says harmonisation of the budget presentation helps in the timely implementation of Community projects such as infrastructure, energy and takes away the possibility of governments applying punitive tax measures against other members.

The region’s ambitious infrastructure projects have been key features in the 2020/21 budgets, aimed at improving trade and transport within the region.

Some of these projects are also aimed at drawing in South Sudan, Ethiopia and the Democratic Republic of Congo and thus boost the EAC economy as a whole.

Besides infrastructure, the region also needs to boost its energy supplies to meet the huge industrial and domestic demands, in a region devastated by Covid-19 control measures.

On June 11, Kenya, Uganda and Tanzania presented their budgets in their respective parliaments for the fiscal year 2020/21.


However, Burundi, Rwanda and South Sudan did not.

Burundi whose financial calendar begins in January and South Sudan were both given time by the EAC Council of Ministers to adjust the reading of their budgets in harmony with the rest of the partner states.

But Rwanda, which plans to increase spending by 7.5 per cent in the 2020/21 fiscal year to Rwf3.245 trillion ($3.43 billion), asked to delay its budget by another week.

Though no reasons were given for the change of date, Rwanda’s delay could be attributed to the fact that this year’s budget will rely more on donor funds.

Finance Minister Uzziel Ndagijimana, while presenting a draft budget in parliament said donors would fund 15.2 per cent of the budget with the rest coming from revenue and debt.

He further disclosed the country would borrow from Rwf783.4 billion but did not give details.

“A few years back, member states agreed to harmonise their budget process, and for the last couple of years, Rwanda, Uganda, Kenya and Tanzania have been doing this on the same day,” said Dr Peter Mathuki, CEO East African Business Council.

“Reading the budget on the same day is important because it is one of the major formulas that are used in the EAC to harmonise fiscal measures that affect each country’s economy,” Mr Mathuki explained.


“It will enable the region avoid anomalies where some countries want to see what others have done in order to take advantage through either lowering or increasing taxes including Customs and excise duty on goods.”

In all, countries in East Africa can no longer pretend to function as isolated units but rather must work as integrated units of a larger bloc.

For instance, Rwanda moved the famed annual baby gorilla naming ceremony, Kwita Izina, to September from June as in previous years. This was done to accommodate a joint tourism promotion initiative between Rwanda, Kenya and Uganda.

The initiative was meant to allow Kenya utilise October to host its Magical Kenya Expo and Uganda milking the month of June for Martyrs Day that falls on June 3.

These were taking place even as Kenya, Uganda and Rwanda implemented the single tourist visa where East Africa is often marketed as a single tourist destination thereby underlining the need to harmonise trade and tourism sectors.