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January 22, 2019

Are we getting value for our taxes

Treasury CS Henry Rotich leaves National treasury building for parliament to present./JACK OWUOR
Treasury CS Henry Rotich leaves National treasury building for parliament to present./JACK OWUOR

Last week East Africa’s Ministers of Finance presented their 2018-19 budget plans; how they intend to raise revenue and spend resources to spur growth and deliver vital public goods, such as education, health, food and nutrition, housing, infrastructure, jobs, security and environmental protection.

Kenya’s spending proposal is $29.7 billion dollars. Tanzania plans to spend $14.3 billion. Uganda will spend $8.5 billion, while Rwanda hopes to maintain its stellar growth on a $2.84 billion budget.

Kenya’s budget is 10 times larger than Rwanda’s, nearly double that of Tanzania and more than triple that of Uganda. But on a per capita basis, Kenya will spend about $590 on every citizen, hence only 2.5 times larger than Rwanda, which plans to spend $237 on every Rwandan. Keep in mind that Kenya’s economy is more than eight times larger than Rwanda’s economy on a GDP basis.

But are East Africans getting value for their tax money? Are Kenyans and Tanzanians better off for having the largest spending budgets? According to the 2017 Ibrahim Index on African Governance report, Rwandans are getting the greatest bang for their buck.

On overall governance, a true measure of state capability, Rwanda is ranked ninth, Kenya 13th, Tanzania 17th and Uganda 19th. On overall sustainable economic opportunity Rwanda is ranked third, Kenya is 11th, Uganda and Tanzania are placed 16th and 19th respectively.

On personal safety, Rwanda is ranked fifth, Tanzania is 10th, Uganda is 22nd, while Kenya is 26th. On gender, measured by women’s labour force participation, political empowerment, and parity in education, Rwanda is first, Uganda is third, Tanzania is 11th, Kenya is ranked 24th.

Public management, which is a measure of budget management, transparency of state-owned companies, and public administration, Rwanda is ranked ninth, Kenya 11th, Uganda and Tanzania are ranked 22nd and 23rd respectively. Similarly, Rwanda is ranked first on accountability, Tanzania 15th, Kenya 17th and Uganda 23rd.

On business environment, which measures investment climate, bureaucracy and red tape, employment creation Rwanda is ranked first, Uganda is ranked sixth, Kenya is ranked 12th and Tanzania 16th.

This is consistent with Rwanda’s remarkable ranking at 40 out of 190 countries on global ease of doing business. Kenya is at position 80. Uganda and Tanzania are ranked 122nd and 137th .

On infrastructure, which includes water and sanitation, electricity, transport and IT capacity, Kenya is ranked 13th, Rwanda 17th, Tanzania and Uganda 34th and 37th respectively.

On the rural sector, measured by support for agriculture, management of land and water resources, and rural business climate, Rwanda is ranked first, Kenya ninth, Tanzania 11th, and Uganda 16th.

On health, measured by child mortality, immunisation, maternal mortality and nutrition, Rwanda is ranked fourth, Kenya 15th, Uganda 26th and Tanzania 34th.

On welfare, a measure of efforts in poverty reduction, social protection, and environmental policy, Rwanda is ranked first, Uganda 12th, Kenya 14th and Tanzania 18th.

What is Rwanda getting right? What can the rest of East Africa learn from the Land of a Thousand Hills?

Alex O. Awiti is the director of the East Africa Institute at Aga Khan University

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