This archive report was first published on 13 June 2020.
On June 11, 2020, the East African Community member states presented their spending plans for the 2020/21 fiscal year, with Kenya's Finance Cabinet Secretary Ukur Yatani unveiling a $27 billion budget and Tanzania's Dr Phillip Mpango planning to spend $20 billion, projecting an 18 per cent growth in revenues.
Uganda's Finance Minister Matia Kasaijja, who expects to finance 75 per cent of his plan from domestic resources, flexed the tax collectors' target from Ush20.5 trillion to Ush21 trillion.
However, the budgets are either based on informed optimism or a bluff, given the uncertainty around Covid-19 and the global economy. The finance ministers may soon be back in parliament to present amendments, as suggested by Uganda's Kasaijja.
The challenge for African finance ministers is to cut social spending without affecting the economy, as public expenditure is the biggest consumer of goods and services.
With the coronavirus crisis still affecting the region, the ministers are gambling on the odds that the adverse impacts will abate early in the new financial year.
But how will they meet targets without something giving way? The performance of trade taxes is contingent on vibrant domestic and external sectors, and the proposed ratios of domestic financing suggest that treasury will be raiding the markets for money.
Amidst subdued exports, the economies need to sustain themselves without trimming the coat to fit the cloth. Citizens need hope, but leaders also owe them the truth if they are to make realistic personal plans for the next 12 months.
