EA

KPMG 2017/2018 East Africa Budget analysis

On 8 June 2017, the Ministers of Finance for Tanzania, Uganda and Rwanda presented their country’s budgets for the fiscal year 2017/2018 to their respective parliaments. The budgets provide key insights on the expenditure priorities that the countries will focus on in the coming year as they look to strategically position themselves and seize their competitive advantage in the region and beyond.

The Kenyan capital was relatively quiet this regional budget day following the shifting of attention to the countryside as the country’s high-decibel election season reaches fever pitch. To accommodate the elections, Cabinet Secretary for the National Treasury presented Kenya’s budget to the National Assembly on 30 March 2017.

The 2017/18 budget submissions come at a challenging time for the region which is reeling from the effects of a prolonged drought that has decimated the all-important agricultural sector, pushing inflation to double digit levels. Despite the slow-down in agriculture, economic growth remained stable on account of increased government spending on infrastructure, which will continue to be a big driver of economic growth in the coming year as major projects in the transport and oil and gas sectors break ground in Kenya, Uganda and Tanzania.

After many years of subdued growth, the global economic growth rate is expected to rise from 3.1% in 2016 to 3.5% 2017 on account of increased confidence in global markets, spurring both investment and consumption. Even then, significant risks still remain. Key among them include threats to international trade protocols from the increasingly inward looking government in the United States, fall-outs from the decision of the United Kingdom to leave the European Union and ongoing military posturing in the Middle and the Far East.

In East Africa, fiscal constraints resulting from increasing government expenditure which is not supported by commensurate increases in revenue collections will continue to put pressure on macroeconomic stability. In turn, this will put in doubt the region’s ability to graduate from a common market to a monetary union, characterised by a common currency and a regional Central Bank by 2024.

Despite the likely challenges, the region remains one of the most exciting investment destinations in Africa and indeed the world.

You can access KPMG’s review of the Tanzania, Uganda and Rwanda budget proposals and tax measures on the following links:

You can also access our review of the Kenya Budget of 30 March 2017 on the following link.

Please get in touch with us for discussions on how the budget measures will affect your business.

PeterPeter Caxton Kinuthia
Partner – Tax & Regulatory Services
pkinuthia@kpmg.co.ke

 

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About Femi Oke

Relentless passion for creativity and digital acumen to help a professional services firm thrive in the digital space. Femi is an individual with a rich experience on regional African knowledge, its diverse business culture and he understands the continent’s economic drive. He thrives on selfless service and lasting mutually beneficial relationships with colleagues and especially clients encountered in the course of his duties. He is creative, practical and self-motivated with business judgement in corporate, brand and strategic communications, social, digital & traditional media and executive profiling. Roles in the firm include New Media, Digital Communication, Corporate Communication, executive profiling and Brand Management execution. Working on the multi-million dollar Africa high growth market project stands out for femi; besides this, managing all KPMG’s digital communication for the World Economic Forum on Africa is another project that gives him great delight. Femi holds a Masters Degree in Global Marketing from the University of Liverpool.

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