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East African Community faces funding crisis

By Mark Anderson in Zanzibar
Posted on Friday, 14 October 2016 10:57

The East African Community (EAC) is to consider imposing sanctions on member states that fail to meet funding obligations as a budgetary crisis looms over the regional bloc.

Just 12% of the payments that member states are required to pay to sustain the bloc’s operating costs have been made so far this year, according to a motion tabled by lawmakers on Thursday.

This despite stellar growth rates in the region compared to other African countries more reliant on strong commodity prices.

“We have been writing letters, we have been visiting partner states…hopefully they will respond to our calls [for payment],” Libérat Mfumukeko, the EAC’s secretary general, told an assembly of 49 regional legislators in Zanzibar.

Mfumukeko told The Africa Report that the bloc is expecting payments from all member states. “Our partner states sometimes face challenges so that is why we are not getting money on time,” he said, refusing to speculate on why his members were withholding payment.

The EAC is comprised of Burundi, Kenya, Rwanda, South Sudan, Tanzania and Rwanda.

Under the EAC’s rules, each member state is required to contribute $8.4m every year towards the bloc’s operating budget.

Burundi and Rwanda have not made any payments for the 2016-2017 financial year, the EAC motion showed.

Kenya, the bloc’s biggest economy with a gross domestic product of $63bn last year, has paid the EAC $2.4m so far this year, which is 28% of the amount it is obligated to remit.

Tanzania has paid the EAC just $550,000 or 7% of the required amount.

The bloc is considering alternative funding sources and is turning to international donors including Germany, Norway, Denmark and the US to fill funding gaps.

“We are facing a funding crisis,” Kenyan lawmaker Nancy Abisai told the assembly. “Are we sure we have enough funding to sustain the committee until the next financial year?”

If a member state does not contribute its financial obligation to the bloc, sanctions can be imposed on them. That would mean that the country would no longer be allowed to participate in the bloc’s customs union or free moment of people.

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