Assessment of the Financing and Investment Policies in the East Africa Community (EAC) and South African Development Community (SADC)Countries Against the Regional Protocols
The study was conducted through desk reviews of Member States Constitutions, Public Finance Management Acts, Budget Laws, Debt Management Laws and relevant legislation. It also reviewed national budgets, Budget Framework Papers, National Development Plans, National Visions, and other strategy documents to understand the extent to which these documents mention the countries' commitments to SADC and EAMU Protocols. The study finds that the majority of countries in the two regional blocs regularly monitor progress towards achieving commitments to respective protocols. In addition, some countries in EAC conduct regular debt sustainability analyses to guide borrowing decisions in a way that matches their development financing needs with current and prospective ability to service the ensuing debt without unduly large adjustments, which could otherwise compromise economic stability. These assessments use benchmarks which are closer to those prescribed by regional protocols. Thus, adherence to these thresholds would also put the trajectory of debt on a solid path towards sustainability. Even where countries are classified as strong performers and their applicable debt sustainability thresholds above those prescribed in regional protocols, recent debt sustainability assessment have shown these countries have remained within regional protocols. In SADC, six (6) countries missed the 60% target for public debt-to-GDP, while ten (10) missed on the 3% budget deficit criterion between 2015 and 2018. In the EAC, the study shows that two (2) countries met the ceiling on fiscal deficit-to-GDP ratio of 3% in 2018, while Kenya is likely to exceed the threshold on debt-to-GDP (of 50% of GDP in present value terms).