On 8 June 2016, the Ministers of Finance for Kenya, Tanzania, Uganda and Rwanda presented their budgets for the year 2016/2017 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 seize the competitive advantage in the region and beyond.
Over the last five years, the average GDP growth in the region has been higher than the global average and the growth in Sub-Saharan average. This trend is expected to continue as the region reaps the benefit of massive investments in infrastructure projects especially roads, rail, ports and electricity.
The coming year is expected to bring its fair share of challenges as Kenya and Rwanda go to the polls. From the past, it is clear that election related anxieties tend to slow down economic growth as investors defer their investment decisions until the elections are concluded.
Globally, economic growth has been weak following a slow-down in China and other key economies. While the reduction in prices of petroleum products has been a boom to East African economies especially in managing inflation and exchange rate pressures, it has slowed down investments in petroleum exploration which is a key growth area for most countries.
KPMG has reviewed the budget speeches from the four countries and we provide below a summary of the budget proposals and tax measures.