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EAC funding under threat as donors object to Nkurunziza’s third term

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The EAC faces a funding crisis that could see many of its projects stall as donors call for the isolation of Burundi. FILE PHOTO | TEA GRAPHIC |   NATION MEDIA GROUP

By TREVOR ANALO and SCOLA KAMAU, The EastAfrican

Posted  Saturday, August 22   2015 at  13:39

In Summary

  • Germany is the second largest contributor to the EAC operations budget after Norway.
  • The threat to withhold funding may derail regional integration, expose the bloc to a future funding crisis, and put several key infrastructure projects at risk.
  • Western development partners have already announced several measures against Burundi that would lead to the loss of hundreds of millions of dollars annually in aid, over President Pierre Nkurunziza’s controversial re-election.
  • The EAC cannot afford a freeze at this time when reduction in funding has led to a scaling down of some of its projects.
  • If the Burundi crisis threatens to drag down the whole region, especially with regards to the financing of important regional projects, The Treaty establishing the EAC provides for ways in which a state can have their membership withdrawn.
  • But if the other member states want to stand with Burundi, there are viable options.

As Burundi’s President Pierre Nkurunziza begins his controversial third term in office, the whole of East Africa will soon feel the effects of a donor freeze occasioned by his decision to extend his stay in power.

The EAC faces a funding crisis that could see many of its projects stall as donors call for the isolation of Burundi.

Sources within the EAC Secretariat and the East Africa Legislative Assembly (EALA) in Arusha confirmed to The EastAfrican that GIZ, a leading German global development agency, has asked the bloc to exclude Burundi from all programmes that the agency funds on regional integration.

Asked to explain the decision, a representative of GIZ said the organisation “is a not a donor agency but an implementing agency for the German government” and instead referred us to the Ministry of Economic Co-operation and Development in Berlin.

The threat to withhold funding may derail regional integration, expose the bloc to a future funding crisis, and put several key infrastructure projects at risk.

Western development partners have already announced several measures against Burundi that would lead to the loss of hundreds of millions of dollars annually in aid, over President Pierre Nkurunziza’s controversial re-election.

The US has suspended several security co-operation agreements with Burundi, and according to Thomas Greenfield, the Assistant Secretary of State for African Affairs, a decision to remove the country from Agoa will come “sooner rather than later.”

European nations led by Belgium, France and The Netherlands have also cut aid to Burundi.

And as President Nkurunziza settles in for his third term after being sworn in in a low-key ceremony on Thursday, Western countries could impose further sanctions.

The EAC cannot afford a freeze at this time when reduction in funding has led to a scaling down of some of its projects.

This year, the EAC’s budget has been reduced by 13 per cent to $110 million. Development partners — who foot 70 per cent of its bills — will chip in $73 million. The five member states will raise $42 million.

Although GIZ is only cutting aid to Burundi and not pulling the plug on the regional bloc, excluding any member from joint programmes could slow down the integration process.

“It complicates the decision-making process,” said Peter Kiguta, who is the Director General of Customs and trade at the EAC. “The EAC makes decisions through consensus, which means we cannot progress on some projects when one member is not present.

“Decisions cannot be made with the exclusion of any state. We cannot hold planning and policy meetings without one member present,” Mr Kiguta added.

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