EAC States table Sh9.9b budget for 2021/22 to drive economic growth
PANDEMIC: Member States of the East African Community (EAC) has tabled $91.8 million (Sh9.9 billion) budget for the 2021/22 financial year during a sitting of the East African Legislative Assembly in Arusha, Tanzania.
Chairperson of the Council of Ministers and Kenya’s Minister for EAC, Adan Mohamed said the 2021/2022 budget comes at a time the Covid-19 pandemic had ravaged economies through lockdowns and economic shutdowns.
In the Budget Speech read on his behalf by Chief Administrative Secretary, Ken Obura (pictured, left), the CS said the road to recovery will be pursued through industrialisation and inclusive growth.
Mohamed said the pandemic had ravaged economies of the region though lockdowns and economic shutdowns.
Longer time
“The reality is that Covid-19 will be with us for a much longer time than earlier anticipated.
The impact of the pandemic on EAC Partner States’ economies has been devastating, to say the least, he said.
Manufacturing and agriculture sectors have been affected due to disruption in global supply chains and a fall in global demand for key export goods such as horticulture produce,” said Mohamed adding that during the year 2020, exports of goods shrank in all EAC Partner States.
Exports from Kenya and Uganda, contracted by 7.6 per cent and 1.7 per cent respectively, between March to June 2020 while during the same period, imports of intermediate goods contracted by 25 percent, 11.3 percent and 22.9 percent in Kenya, Uganda and Tanzania respectively,” he said.
“Similarly, the industrial sector in Rwanda, Kenya and Uganda shrunk by 3.5 percent, 0.5 percent and 6.3 percent respectively.
In addition, Covid-19 has led to deteriorating external positions in all EAC Partner States on account of its adverse consequences on tourism and aviation sectors, workers’ remittances, foreign direct investment and loan disbursements,” added the Chair.
The Chairperson informed Members that economic growth in the EAC region averaged 2.3 percent in 2020 compared to an average of 5.4 in 2019.
“The weak regional economic growth in 2020 was mainly due to disruption of businesses and economic activities in the region following the outbreak of the Covid-19 pandemic for which the first case was reported in the EAC region in mid-March 2020.
Containment measures put in place to limit its spread, including travel restrictions and lockdowns, led to a contraction of GDP in all the EAC Partner States,” said Mohamed.
