The oil and gas revenue take much longer to arrive than planned, and when it does, it is much lower than anticipated. Gas plants and refineries are more complicated and costly to build in Uganda and Tanzania. Worse, energy prices fall, as the global energy market is flooded with new production from South Africa, Australia and the United States. East Africa’s growth slows, tax revenues shrink and international debt repayments squeeze government budgets hard. The region’s much celebrated sovereign wealth funds are empty.
In response, the free laptop programme is cancelled; mothers are asked to‘contribute’ when giving birth and parents are pushed to fund their local schools’teaching equipment. Classrooms are severely overcrowded, doctors don’t come to work and medicines migrate from public dispensaries to private pharmacies. ‘Free’services become very expensive indeed.
Taxes are raised and services cut in an effort to balance budgets and to pay the bondholders. Hawkers and other small businesses are vigorously pursued to pay taxes, but the exemptions enjoyed by the big firms remain untouched. VAT and other consumption tax rates are increased. Opposition politicians and activists who protest this unfair treatment are appointed to various well-paying boards and public commissions. Their protests fade.
With its own revenues under pressure, the EAC Secretariat is asked to help governments identify new cost cutting measures. It proposes to outsource the management and maintenance of major regional roads to private contractors. All road users, especially passenger buses and minivans, paya toll. Fleets of cargo trucks are exempt in order to avoid raising transport costs.