The Finance ministers of all five East African Community member states are this afternoon expected to table the 2012/2013 Budget estimates for their respective countries.
Through their respective legislative bodies, they will hint on how their governments will go about collecting revenues with which to support their recurrent and development expenditure.
Just like during financial year 2011/2012, the ministers will explain how the need to foster development will be addressed amidst yawning budget deficits largely due to skyrocketing debt bills.
For instance, analysts say Uganda’s fiscal deficit will likely rise in the coming financial year, what with domestic revenues sagging on the back of weak economic growth.
As for Rwanda, the overall deficit for next year is forecast at 132.4bn francs, equivalent to 2.8 per cent of the GDP, compared with 77.1bn francs (or 1.9 per cent) this year.
In Tanzania, Finance minister Dr William Mgimwa is expected to unveil a ten billion USD budget, out of which USD3.3bn will be staked for capital investments. However, the Tanzanian story on debt servicing appears less inspiring than that of Rwanda, Uganda and probably Kenya.
What looks rather curious this time is that at least 54 per cent of Tanzania’s development expenditure will go into the servicing of debts, currently hovering at USD15bn.
Kenya is in a much similar quagmire, its debt expected to balloon to USD17.6bn next year, largely owing to excessive borrowing. As for Burundi, no figures were availed on its 2012/13 budget estimates.
What is worse is that, while the sources of revenue for all five countries have always been seriously limited, this time around things are generally even worse. One reason is that the rich nations that have traditionally stood as their most dependable development partners are also grappling with rising debt burdens and unchecked deficits or are suffering from donor fatigue.
What then is the way out? Definitely the governments will take a number of fiscal and non-fiscal measures in trying to arrest the situation. The issue, though, is how efficacious they can and will be.
To tackle these phenomena and ensure effective regional development, East African states need to severely cut on conspicuous consumption across all sections of society. The world has changed and states must operate even more efficiently than the most effective of private companies.
Governments and public servants must always remember that they survive and chiefly thanks to common Tanzanian and foreign taxpayers’ money and that planning to lead lives of luxury is therefore not an option.
Besides the ongoing common deficit financing often leading to massive debts, government borrowing ought to be played down as a paradigm for economic development because it has proved to be more of a curse than a development agent.
East African states must come up with instruments that involve wider participation by the citizenry rather than merely relying on donations and borrowed funds, a substantial portion of which usually serve irrelevant purposes.
All pillars of state governance as well as the citizenry know enough about this and can easily decide to arrest the tragic trend. The time to do so is now as it is getting too late.