After the high growth rates of 7% and above achieved across the board the previous year, the three countries experienced mixed fortunes in 2008/09.
Tanzania’s 2008/09 performance at 7.4% GDP growth was the best in East Africa, and most sectors did well. Indeed, it could have been even higher if it were not for the falling global prices for minerals and natural resources, which adversely affected the mining and natural gas sectors.
Uganda’s GDP growth rate of 7.0% came a very close second, but this was lower than the previous year’s 8.3%, and this is largely due to declining growth in the industrial, wholesale and retail sectors.
Kenya’s 1.7% was almost entirely self-inflicted, and the impact of the 2008 post-election violence continues to be felt, with the agricultural and tourism sectors being the worst affected. To be fair, the agricultural sector’s poor performance could be attributed in part to lack of rain and the high global prices of inputs and fertilizer.
To stimulate growth in the coming year, all three countries announced huge increases in their expenditures on infrastructure development and various pro-poor initiatives, and they all propose to fund this increase by borrowing from the domestic market.
For further insights about the East Africa Budgets, click below to access the full version of the each country’s Budget Briefs:
kpmg_kenya_budget_brief_09.pdf, Size: 906.0 KB© 2009 KPMG East Africa Limited, a Limited Liability Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
