[East Africa] Poverty, Power, Top EAC Budgets

from All Africa

Ben Moses Ilakut
Kampala

Finance ministers from the three East African countries last week demonstrated that poverty and power shortage are perhaps their biggest challenges today and years to come.

But the ministers also showed that amidst all odds the East African Community must grow if they have to overcome common challenges.

Like his colleagues Dr Ezra Suruma (Uganda), Mrs. Zakia Meghji (Tanzania), Kenya's finance chief Mr Amos Kimunya said despite the strong economic performance in the last three years, poverty and unemployment remained a big challenge. In fact, analysts said last week that rapid rejuvenation of Kenya's economy has had little effect on the lives of the majority poor.

Figures show that the gap between the country's poor and the rich has continued to widen in spite of a three-year sustained economic growth.

The same message came out strongly in Tanzania as it did in Uganda. In Uganda, the eradication of poverty came top on the list of government priorities, only second to power.

Unlike in the past when defence was top most in the agenda, this time round poverty, social services and scientific research made it to the priority list.

In Tanzania a whole 45.8% of the national budget was allocated to the National Strategy for Poverty Reduction and Economic Development (MKUKUTA), which will be spent on economic growth.

Mrs. Meghji said the funds would be spent on infrastructure, such as the completion of road projects, completion of the large-scale water project that extends from Lake Victoria to the towns of Shinyanga and Kahama.

But the budgets laid lots of emphasis on the power crises which have cause regression, especially in Tanzania and Uganda.

Uganda's Ezra Suruma gave an extra Ush70billion to thermal generation to procure 100MW of electricity in addition to the deferral of loan repayments to government amounting to Ush33billion per year.

The budget also allocated Ush99billion to the Energy Fund, a newly created outfit, which is expected to be ring-fenced for dam construction only.

The fund is expected to facilitate the development of large hydropower generation facilities at Bujagali and Karuma to address the power crises in the long term.

Tanzania on the other side took pragmatic measures to diversify and enhance the country's electricity generation capacity, upgrade the national electricity grid and distribution network.

The funds will be spent to increase generation capacity for TANESCO by approximately 145MW.

And like Uganda and Kanya, Tanzania will this year amend the East African Community Management Act 2004 in order to effect a number of aspects related to Common External Tariffs (CET) and harmonization of several other rates.

Mrs. Meghji said the intended amendments to the EAC-Common External Tariffs (EAC-CET) "will be effected through a Legal Notice that will be published in the East African Community Gazette."

In Uganda Suruma announced similar measures including the reduction of duty imposed on selected goods from Kenya from 10% to 8% in addition to exempting from import duty, energy saving appliances in response to the current power crisis.