East Africa's growing Economic independence
|Proposed second Terminal at JKIA, Kenya|
EAST AFRICAN COUNTRIES are increasingly becoming independent from the economic standpoint. The regional countries read the coordinated budget for the year 2014/15. The budgets amounted to US$40 billion, a whopping 30 per cent of the GDP estimated at US$120 billion.
An outstanding feature of the budget is that the region will finance on average, 76.5 per cent of the total budget from domestic sources. This is a major leap compared to 10 years ago when the region financed only about 55 per cent of their US$11 billion budget. Only Kenya, the largest economy in the block could finance her 2004/05 $6.7 billion budget from the domestic sources. Tanzania, whose budget in 2004/05 stood at $2.5billion, could finance only 59 percent of her budget from domestic revenue. Ten years later, Tanzania will finance to 61.4 per cent of a budget that is five times larger. The current budget stands at US$12 billion while domestic revenue will stand at US$7.4 billion.
Uganda, which financed 54 per cent of her budget estimated at US$1.8 ten years ago, will finance 82 per cent of the 2014/15 budget which is three times larger. The current budget stands at US$ 5.8 billion while the domestic revenue will stand at $4.8 billion.
|Construction of Bujagalli Hydro Dam in Uganda|
Kenya for her part will finance 86 per cent of her US$20 billion budget from domestic revenue. This is to say she will raise some $17.7 billion from domestic revenue. This is a decline from the previous level where she funded 96 per cent of her budget which was a third of the current budget. The budgets are a confirmation that East African economies have been on a growth trajectory over the past decade creating opportunities for economic players, putting more money in people’s hands and reducing poverty.
This trend has analysts saying that East Africans are slowly but surely taking charge of their economy. The casualty of this trend is aid dependency which has declined from nearly 50 per cent to less than 25 per cent in 10 years. This decline is expected to accelerate further and even be eliminated in less than 10 years as the region begins to produce oil and Natural gas.
|Kigamboni Bridge in Dar-Es-salaam, |
Another outstanding feature is that more than 20 per cent of the budget will be development expenditure. Much of the money will be spent on physical Infrastructure. Transport infrastructure will gobble up some $4.0 billion broken down as: Kenya S1.7 billion; Tanzania $1.3 billion and Uganda $0.995 billion. In addition they have allocated huge sums to electricity generation.
Both Kenya and Uganda will construct a regional Standard Gauge Railway from Mombasa to Kigali Rwanda through Kampala in Uganda. Tanzanian for her part is planning to rehabilitate both the rolling stock and the hardware on central railway line.
Natural resources have placed the east Africa in the pedestal of an expected economic boom. Consequently physical infrastructure has been identified as the major bottleneck to the exploitation of such resources and the resultant largesse. Consequently the region is investing heavily on energy and transport infrastructure. Estimates show that the block needs to spend an estimated $10-13 billion a year on infrastructure up to 2020.
This economic independence and the resultant dilution of aid importance has emboldened Africa resulting into several run ins with the donor community especially in the West. Africa has in the recent past chosen an independent path defying Western nations that have been promoting what to Africa is debauchery.