Revenue Securitization as Fiscal Instrument in East Africa: A Comparative Analysis of Kenya, Tanzania, Uganda, and Rwanda
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Abstract
Government revenue securitization has emerged as a defining fiscal controversy in East Africa, with Kenya's decision to ring-fence future levy collections through Special Purpose Vehicles generating a live dispute with the International Monetary Fund over sovereign debt classification. This paper adopts a structured comparative case analysis methodology, drawing on primary fiscal documents, official government gazettes, multilateral technical reports, and central bank publications to examine how Kenya, Tanzania, Uganda, and Rwanda have diverged in their approaches to domestic revenue mobilization. An original Fiscal Instrument Classification Matrix is introduced, plotting sovereign financial instruments along two axes: fiscal transparency and the hardness of the debt service obligation. The analysis demonstrates that Kenya's securitization model occupies a structurally distinct and fiscally risky position, combining hard economic debt obligations with deliberately limited parliamentary and public oversight, while Tanzania, Uganda, and Rwanda have each addressed comparable revenue pressures through Quadrant I instruments that preserve transparency and fiscal flexibility. The paper argues that the core problem in Kenya is not securitization as an instrument class but the specific governance quadrant its government securitization occupies, an architecture that transfers future revenue control to private bondholders, systematically understates sovereign debt stock, and constrains future administrations. Implications are drawn for debt sustainability analysis, International Monetary Fund program design, and the architecture of fiscal rules across the East African Community.
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