Online Reporter
East African finance ministers will be walking a tightrope when they reveal their spending plans on Thursday, with ballooning debt, underperforming revenue and geopolitics challenging planned fiscal consolidation.
Uganda, Rwanda, Kenya and Tanzania will present their budgets to lawmakers, as the region grapples with cuts in foreign aid and the turmoil unleashed by US President Donald Trump’s trade war.
Political and technical challenges have resulted in lower-than-expected tax yields in the region, according to Connor Vasey at London-based advisory firm J.S. Held.
“Governments are caught between unpopular tax measures and persistent spending cuts, which fall disproportionately on development expenditure.”
To address these challenges, the four countries plan to increase spending by a combined US$5 billion in the 12 months through June 2026, compared with the 2024-25 fiscal year, despite rising debt payments and limited room to lift taxes.
“It is impossible to craft a budget which pleases everyone, but in the region it is getting harder to draft one which pleases anyone,” Vasey said.
Here’s what to expect when the finance ministers present their budget statements. Treasury Secretary John Mbadi will present the nation’s budget a year after planned taxes on everything from bread to diapers sparked deadly protests in which at least 60 people died. To avoid a repeat, Mbadi has been holding informal meetings with citizens to win support for his 4,24 trillion shillings (US$32,8 billion) expenditure plan that includes the removal of tax breaks on mobile phones, pharmaceuticals and animal feed. — Bloomberg
