35.9 C
Tunisia
Tuesday 21 September 2021
HomeAfricaEast African states outline steps to battle global economic crisis

East African states outline steps to battle global economic crisis

East African states are seeking modest economic stimulus packages, aimed at steering their countries through the global economic turbulence, and outlining plans to i ncrease agricultural production and increase regional trade.

In the fiscal plans unveiled Thursday in Kenya, Uganda, Rwanda and Tanzania, the respective finance ministers unveiled plans aimed at steering their economies through the financial crisis and avoidin g adverse tax measures likely to create social backlashes.

Ugandan Finance Minister Syda Bbumba announced a budget of US$3.3 billion, a 14 percent spending increase, while Kenya, the region’s largest economy, announced a budget of US$11.4 billion.

Tanzania, whose revenue collection dropped by 10 percent due to the effects of t he global economic crisis, announced a budget of US$7.3 billion.

The Ugandan Minister said the government avoided heavy taxation in order to allo w the economy to grow this year, despite the effects of the global economic recession.

On his part, Kenya’s Finance Minister Uhuru Kenyatta also avoided taxation measu res, which have become traditional in almost every fiscal plan unveiled by the government.

The Kenyan minister’s plans to tighten the loopholes in the financial system’s r egulation earned some praise, but the main plan was to woo back foreign investors who have fled the local market, following the onse t of the global financial crisis in late 2008.

East African countries expect their economies to suffer slower growth in 2009 as a result of the effects of the global financial crisis.

The global economy, Uhuru said, recorded a 1.3 percent growth and is expected to resume growth in 2010, with an estimated growth rate of 1.9 percent.

In East Africa, growth is expected to slowdown to 5.6 percent in 2009, compared to the average growth rate of 9.4 percent the region recorded in 2008.

“There would be no more tax increases to allow the economy to grow,” Bbumba said .

Ugandan authorities sought to stimulate the financial sector by offering banks t hat offer credit guarantee scheme for firms in the agricultural sector some tax concessions. The move is aimed at increasing bank l ending to agriculture.

“Uganda hopes to become Africa’s bread basket. Increasing production, investment in agriculture would facilitate regional trade and growth,” the minister said.

Uganda also hopes to build a fibre optic cable across to Kenya to link up with a n international cable that Kenya has built from Fujaira, in Saudi Arabia.

“The fibre optic to link with Kenya’s national backbone would be built,” the min ister added.

She also announced a five percent payhike for Ugandan civil servants to make lif e better for them during the economic crisis sweeping through the globe.

“I have provided a modest pay increase for public servants to cover up for the e conomic hardships that we are facing during this crisis,” she added.

In Tanzania, Finance Minister Mustafa Mkulo said due to the economic crisis, the returns were below expectations.

”The income was lower than expectations by 10 percent,” he told parliament.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

MOST POPULAR

HOT NEWS