East Africa budget day

East African countries in the region are gearing up for a crucial budget day as they outline their tax and spending plans for the 2024-2025 fiscal year. The budgets have all faced a funding squeeze as governments pursue fiscal consolidation amidst a myriad of regional and global challenges. Tanzania, Kenya, Uganda, and Rwanda are the countries in focus for this budget season. Let's delve into the key highlights of the upcoming budgets for these East African nations. Starting with Rwanda, the country has approved a budget of 5.69 trillion Rwandan francs, representing an 11% increase in overall spending compared to the previous fiscal year. The Ministry of Finance aims to cover a budget deficit of around 1.3 trillion Rwandan francs through debt and anticipates receiving 725 billion Rwandan francs from external grants. Additionally, Rwanda is forecasted to achieve a growth rate of 6.5% in 2025, slightly lower than the 8.2% growth recorded in 2023. Noteworthy changes in Rwanda include a shift in the finance minister's position, as Dr. Uziel Ndagizimana transitions out and upcoming elections in July, indicating a period of economic and political transition. Moving on to Kenya, the parliament has approved a budget of 4.8 trillion Kenyan shillings for the fiscal year 2024-2025, with an aim to raise 2.9 trillion shillings from domestic taxes. The budget also includes a deficit to be financed by 441 billion shillings from external aid. Kenya faced challenges earlier in the year due to currency fluctuations and the pressure to repay its euro bond in June. The approved budget reflects a significant 28.84% increase from the previous fiscal year, signaling substantial allocations towards various sectors in Kenya's economy. Uganda's budget estimate for the new government year stands at 72.1 trillion Ugandan shillings, marking a 25% increase from the initial proposal. Notably, nearly half of the budget will be sourced from domestic revenue, showcasing Uganda's efforts to secure funding amidst challenges with international partners like the World Bank. The country's budget allocation reflects a strategic focus on economic transformation and development initiatives to boost growth and stability in the region. In Tanzania, the approved budget for the 2024-2025 fiscal year amounts to 49.3 trillion Tanzanian shillings, demonstrating an 11.2% increase in spending. Tanzania is prioritizing fiscal discipline, with a keen interest in managing its bonds and staying within budget targets. The country aims to balance economic growth and financial stability to navigate global inflation pressures affecting East African economies. As the budget day unfolds across East Africa, stakeholders are closely monitoring the allocations and strategies outlined by finance ministers to address economic challenges and foster sustainable development. The budgets reflect a mix of fiscal consolidation measures, strategic investments, and efforts to leverage external support for economic advancement. The region is poised for a period of transition and growth, with pivotal decisions shaping the trajectory of East African economies in the coming fiscal year.