East Africa Community countries have raised spending by 20 per cent for the next fiscal in their 2012/2013 budgets read on Thursday, with an eye on job creation, as respective Finance Ministers warn of tough economic times ahead.
The region’s economies have been battered by high food and fuel costs, fluctuating currencies and diminished revenue collection, and
with pressures of surging unemployment, high cost of living and weakening currencies, the governments opted to increase spending that have left their frail economies with the biggest budget deficits ever.
Kenya, Uganda, Tanzania and Rwanda raised their combined spending from $26.6 billion in the 2011/2012 financial year to $32 billion in 2012/2013, according to budget spending plans released by the finance ministers.
Kenya’s total budget stands at Ksh1.4 trillion ($17 billion), up from Ksh1.1 trillion ($12.9 billion) while that of Uganda is Ush11.1 trillion ($4.4 billion) compared with last year’s Ush 9.2 trillion ($3.6 billion).
Tanzania will spend TSh15 trillion (9.5 billion), a rise from Tsh 13 trillion ($8.2 billion) compared with Rwanda’s Rwf 1.3 trillion ($2.3billion), up from Rwf 1.1 trillion ($1.9 billion) in 2011.
Sharp increases in deficit levels are likely to raise governments’ borrowing costs, divert resources from crucial social services like health and affect the standards