The East African Community risks paralysis if it does not get additional funding on its budget day, June 22.
The secretariat says that the $90 million proposed in the bloc’s 2021/2022 budget by the Council of Ministers can’t finance its development agenda.
Among the priorities to be achieved within this financial year are consolidation of the Single Customs Territory; infrastructure development; enhancement of free movement of factors of production across the Partner States; regional industrial development; improvement of agricultural productivity and value addition; promotion of regional peace, security and good governance; and institutional transformation at the regional and partner state levels.
The admission of the Democratic Republic of Congo, which is being fast-tracked, also faces headwinds, as there are no funds for the drive.
The EAC Ordinary Council of Ministers recently tabled a $90 million budget, $7 million less than the 2020/2021 budget.
The East African Legislative Assembly said that the amount is not even sufficient to run the Secretariat, pay sitting allowances to EALA MPs, and fund the activities of the East African Court of Justice.
“This year’s budget can’t fund the activities of the EAC,” said Denis Namara, chairperson of the General Purpose Committee in charge of budget approval, adding, “There is therefore a mismatch between the Council’s activities and the money allocated.”
“The Council should look for more funds even if it means borrowing from the General Reserve to fund the EAC activities,” he added.
The EAC Ministers have directed EAC Secretary-General Peter Mathuki to find ways of bridging the funding gaps in the budget to save the situation.
During the 31st meeting, held on June 11, ministers directed that the utilisation of mobilised funds should be in line with the legal provisions, policy guidelines and existing council decisions, according to Kenya’s EAC Cabinet Secretary Adan Mohamed, who chairs the Council.
The funds for the EAC Secretariat are meant to cater for staff recruitment, legal and judicial activities, ICT, travel and administration.
EALA is demanding sitting allowance arrears amounting to $1.6 million, plenary sessions $1.5 million, sensitisation $300,000, office of the Speaker $200,000 and more for the inter-parliamentary games and oversight.
Mr Namara said the proposed budget can only cater for salaries. This could put the brakes on the implementation of the EAC Monetary Union, tours to collect partner states’ views on a political confederation, and other activities, including the DR Congo admission.
“If a department is asking for $800 and they are given $200 dollars, that money will be misused because they can’t use it for the purpose they set out to,” said Mr Namara.
There is disquiet in the Secretariat as the Council slashed travelling allowances for the EAC staff, sitting allowances for EALA, whose full sessions have now resumed in Arusha, and emoluments for day-to-day running of the organs for the EAC. The EAC Budget has been reducing since 2019. In the 2019/2020 financial year, EALA approved $111,450,529, and in 2020/2021 the Council presented a $97 million budget — a $14 million reduction. Now, the Council has proposed $90 million. The over $20 million drop is blamed on reduced activities due to Covid restrictions and limping regional economies.
The 2019 budget gave the EAC Secretariat $53.2 million, EALA $18.9 million and the EACJ $4.2 million. But this year’s estimates have reduced the amounts to $42.6 million for the secretariat, $15.6 million for EALA and $3.7 million for the EACJ.
Secretary General Mathuki inherited empty coffers when he took over from Liberat Mfumukeko two months ago.
During the 42nd Extra Ordinary meeting of the Council, held on May 7, it was revealed that although the activities had been budgeted for, the budget allocation for the Office of the Secretary General for the 2020/2021 financial year had been exhausted by the end of April.
During last year’s budget, Council chairperson and Rwanda’s Minister in charge of EAC Affairs Manasseh Nshuti argued that due to Covid-19, EAC partner states were impacted economically and therefore reduced their remittances.
The EAC’s main activities are funded through partner states' contributions.
Kenya, Uganda, Tanzania, Rwanda, Burundi and South Sudan were each required to contribute $7.8 million in 2020/2021, compared with $8.2 million in 2019/2020.
“South Sudan owed $27 million, but has since remitted at least $4 million,” said Dr Mathuki. Burundi, which owed $6.5 million has remitted $4.04 million.
“South Sudan and Burundi have paid some money, but that is not the problem. The problem is that all the money they remit goes to the General Reserve. We need Council approval to spend it,” said Mr Namara.