Which way East African Community over funding, EPAs?

Wednesday January 4 2017

An extraordinary summit of the East African

An extraordinary summit of the East African Community heads of state was held at the State House Dar es Salaam in Tanzania on September 8, 2016. PHOTO | FILE 


The East African Community Heads of State are expected to meet in a few weeks to discuss what direction the Community should take, following a slow year of implementation of key integration projects.

The Heads of State Summit usually held in November was postponed to January 2017 following a request by Tanzania for time to consult on whether the EAC–EU Economic Partnership Agreement (EPA) was viable.

The EPA will be the key agenda at the summit. In November, Tanzania’s parliament decided against signing the EPA, saying that the country would not benefit from the deal.

The EAC partners, especially Kenya, hope to persuade Tanzania to sign the agreement and that President John Magufuli will make a final country’s decision. This will then allow the presidents to make a final decision.

The EPAs were to be signed last July but Dar es Salaam asked the EU to extend the deadline to January 2017 as it does a cost-benefit analysis of the deal.

Kenya has already signed and ratified the EPA agreement while Rwanda signed the EPA agreement but it is yet to ratify it.

Uganda has indicated that it will sign while Burundi said it is not in a position to sign the EPA because the EU had suspended services with the government, while still working with the private sector and the civil society.

Article 37 of the EAC Customs Union Protocol stipulates that the Partner States should sign the EPA as a bloc.

The other key agenda for discussion by the presidents at the beginning of the year will be the funding for the community.

The partner states are expected to make a decision on a proposed alternative funding mechanism to reduce reliance on donors. EAC relies on donors for up to 70 per cent of its budget.

Uniform concessions

The Heads of State Summit held in March 2016 resolved that partner states consult on the option of funding the Secretariat’s budget from uniform concessions from member countries and a new levy — tentatively one per cent — targeting imports and exports.

The EAC was reported to have been facing a funding crisis that stalled some of its projects as donors called for the isolation of Burundi, whose president had won a controversial third term in office.

Meanwhile, the East African Legislative Assembly (EALA) has raised concern over the delays by partner states in remitting their budgetary contributions to the EAC Secretariat.

Of great concern is Burundi, which has so far not paid anything for the 2016/2017 budget. Burundi only recently remitted its 2015/2016 contribution.

Of the 2016/17 budget totalling $101,374,589, each of the five member countries is expected to contribute $47.5 million while the development partners raise $46.7 million compared with $58.5 million they disbursed to EAC for 2015/2016 financial year. The rest of the funds will come from other sources.

Uganda is so far leading in its payment and has paid 88.9 per cent of the amount due.

Kenya has paid only 28 per cent of the total amount while Rwanda and Tanzania have remitted only 23.8 per and 6.6 per cent respectively.

It is also expected that the EAC presidents will launch the harmonised EAC higher education system that will allow students to transfer credits to higher education institutions in five partner states.

The other matters for consideration by the Heads of State are the signing into law of the EAC, the one-stop border posts and the vehicle axle-load control Acts, progress on the mediation of peace talks in Burundi and South Sudan.