East Africa which traditionally consisted of Kenya, Uganda and Tanzania has practised a system of centralisation for several decades following independence. This had the effect of weakening institutions resulting in them being incapable of delivering services. The capacity issues are critical as the lack of professional staff is a challenge. The meagre allocations to the development budget implies that there is limited or no development. Local government has in this context broad experienced financial and staffing challenges and lacked autonomy to make decisions. The underdevelopment of the rural areas relative to infrastructure is a challenge and there has to be rural transformation in this regard. New Public Management has influenced reform strategies and more specifically decentralisation. The reform strategies did impact positively on implementation of the Millennium Development Goals (MDGs). However, the quest for a sound economy and a reduction in poverty levels is yet to materialise. Despite these challenges, East Africa is comparatively better off than the other regions on the Continent.