Africa’s Fastest-Growing Region Banks on More Spending for Growth

Africa’s Fastest-Growing Region Banks on More Spending for Growth
Africa’s Fastest-Growing Region Banks on More Spending for Growth

East African countries plan to increase spending dramatically on infrastructure projects in budgets to be released Thursday. It’s not clear they can afford it.

Kenya, Tanzania, Uganda, Rwanda and Burundi will unveil plans to fund the building of more roads, railways and power plants, as well as expand services such as health care and education, for the year starting July 1.

Spending will probably climb about 10% in Kenya in the next fiscal year, 17% in Uganda and 11% in Rwanda, while it will be broadly flat in Tanzania, the nations’ respective governments have said in forecasts. GDP in East Africa will probably expand 5.9% in 2019 and 6.1% in 2020, according to the African Development Bank, making it the fastest-growing region on the continent.

Kenya is implementing its so-called Big Four agenda, which will see the region’s largest economy hand over no less than 500,000 houses to first-time homeowners by June 2022, and develop more manufacturing, food production and health care to create jobs in a nation where unemployment is a sticking electoral issue. The projects will cost 405 billion shillings ($4 billion) in the coming year, budget estimates show.

If approved by lawmakers, about 7.5% of Tanzania’s 33.1 trillion-shilling ($14 billion) budget will go toward building a standard-gauge railway line that will link the East African nation’s commercial city of Dar es Salaam with the town of Mwanza along Lake Victoria, through the capital, Dodoma. The country is due this month to start building the 2,115-megawatt Rufiji hydropower project.


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