EA Finance ministers juggle to fund recovery but debts mount
Ongoing construction of the Nairobi Expressway in Kenya. Regional economies are borrowing more to plug deficits but economists warn the misuse of borrowed cash through wastage and corruption risks pushing countries into debt overhang. PHOTO | FILE | NMG
East African finance ministers are walking a tightrope as they try to fix economies ruined by the prolonged effects of the Covid-19 pandemic and repair national balance sheets saddled with huge debts, shrinking revenue sources and increasing expenditure needs.
As the ministers gear up to table the 2021/2022 fiscal year budgets in June, they must come up with ways to fund economic recovery plans without loading more taxes on an already burdened citizenry, or taking up additional debt. Debt servicing obligations have become a nightmare for regional economies, which have seen significant portions of tax revenues used in paying interest on loans rather than fund government operations and development projects.
