An analysis on the link between Public Debt and Domestic Revenue Mobilization (DRM) within the EAC
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Countries in the East African Community (EAC) have continued to witness an escalating debt situation that has now been worsened by the COVID-19 driven crisis. Even before the pandemic, EAC countries had already accumulated public debts to a tune of 110 Billion USD1. As a result, of the shrinking domestic revenues arising from low economic activity, these countries have now resorted to borrowing as the only available alternative to finance their budgets. As a consequence, the region’s public debt has now soared to 120 billion with individual country debt levels already threatening to breach the agreed upon thresholds of 50 percent of respective country GDPs. It remains key to note that the rising public debt remains a key threat to the region’s Domestic Revenue Mobilization efforts and consequent fiscal sustainability.
- Social Sciences