Nairobi-East African countries are set for a major review of their financial year calendars following pressure from major donors.
The shift, to be implemented in the next two years, will see Kenya, Uganda, Tanzania, Rwanda and Burundi change the start of their budget calendars from the current mid-year to January.
The move, fiscal analysts say, is aimed at aligning the region’s budget calendars with those of donor countries.
The East African has established that Kenya is planning a study on the proposed shift, the findings of which will then be tabled in parliament for debate.
According to Finance Minister Uhuru Kenyatta, the proposed shift will have to be spearheaded by the region as a bloc.
“With the current level of integration in East Africa, no single member will undertake a major fiscal policy change without consulting the rest,” Mr. Kenyatta said, adding: “If the move is for the betterment of our region’s economies, then we have no option but to pursue it as a bloc.”
A budget consultant at the International Monetary Fund told The East African that the move is likely to increase donor and grants allocation to the East African region.
“Uganda and Tanzania will certainly be the major beneficiaries of this development since their budgets are still highly dependent on donor funding,” the source said, adding: “Over the past years, the region missed on major international funding sources because of the conflict in their budget calendars,” he said.
Majority of donors have their budget calendars ending in December 31.
Currently, Uganda’s budget depends on $228 million in donor support with an investment project assistance of over $176 million.
The World Bank, through the International Development Association, remains the key donor to the country followed by the European Union, United Kingdom and the African Development Bank.
In this year’s budget, Tanzania had projected to cut its dependence on donor funding but domestic receipts could not bridge the budget gap due to the global economic crisis, which hurt prices of major commodities such as coffee, cotton and horticulture.
Budget experts say the review is part of the wider public financial management reforms programme for Kenya, which has been pursued for the past few years in a bid to strengthen the credibility of the budget.