On June 14^th 2007, East African states presented their annual budgets for the year 2007/8. All  presentations harped on adoption of new technology and making light  the regulatory burden on doing business by reducing the costs of registering and transferring property, improving access to credit and reducing the cost of trading across borders. Of note was the average economic growth of 6.5 in the region, which was higher than the average growth achieved by non-oil producing countries in Africa, estimated at 5.2 percent in 2006.

Investments in Energy Infrastructure

Energy development being critical in improving competitiveness of goods produced within the region was a key factor. Major commitments were made to invest in the development of reliable energy infrastructure. In Uganda for example, the government provided USD 71M for development of hydro power plants and related infrastructure in addition to deploying cheaper heavy fuel oil (HFO) thermal generating plants in the medium term to mitigate use of more expensive diesel plants. In Kenya, the government allocated USD114M to enhance further development of the energy sector and to support rural electrification programme created to make power more accessible to a majority of Kenyans. To lower the tariff for transporting petroleum fuels, and reduce, among others, the road maintenance costs, accidents and environmental pollution, the Kenyan and Ugandan Governments will forge a partnership to extend an oil pipeline from Kenya to Uganda by the year 2008. Tanzania waived import duty on solar equipment inputs and energy saving bulbs to encourage use of alternative energy, reduce consumption of electricity and conserve energy for other sectors of the economy.

Development and Maintenance of Transportation Infrastructure

Being land locked, road transport is the dominant mode of transport in Uganda, accounting for over 82 percent of the volume of freight and human movement. However, over 60 percent is in poor condition. The Ugandan Government provided a total of USD30M for creation of new roads and completion of stalled projects. It also created a road fund to allow a direct link between payment of road by users and the provision road of maintenance. Despite the strong growth experienced in the transport and communication sector in the past year, the Kenyan Government increased the budgetary allocation to roads by 46% to USD885 M this year.  

Science, Technology and Industrial Development 

In response to the apparent digital divide which has created an imbalance in the utilization and access to technologies between the developed and the developing nations, this year’s budgets focused more on bridging this gap intended to make the region a preferred investment destination for ICT related activities with a view of creating more wealth and employment opportunities.  

The Kenya Government made a commitment to facilitate the completion of its ongoing ICT infrastructure expansion in order to improve broadband connections and  create a National Fiber Optic Network. It allocated USD14 M towards The East African Marine System (TEAMS) project, whose completion by mid next year is expected to provide cheaper and faster Internet connection with the rest of the world. In addition, this project is expected to significantly reduce the cost of making both local and international telephone calls. Other plans are to restructure and privatize the national telephone operator, Telkom Kenya, before the end of the fiscal year in order to improve its operational efficiency and further reduce the cost of telephony in the country.

In a similar move, the Tanzanian government waived duty on importation of cordless line telephone handsets and cellular wireless network. These tax waivers will encourage the growth of communication through the reduction of calling costs. 

Other than fully liberalizing the telecommunications sector, the Uganda government provided USD3M to fund the construction of a National Data Transmission Back Bone to enhance Uganda’s domestic fibre-optic network and wireless capability.  

Committing and allocating funds for the development of ICT in East Africa are pointers to the right direction but will be meaningless if not followed by immediate action. In the past, most well intentioned projects have ended up as white elephants due to poor workmanship, lack of commitment and poor utilization of available funds. In this regard, it will be important to learn from past mistakes.