The East African Community (EAC) is eyeing increased donor funding for its development projects after it passed the European Union’s financial risk test last year.
The EAC secretary-general, Libérat Mfumukeko, said key development partners “are once again ready and willing to continue supporting the community” after previously casting doubt over financial management.
“The most promising is the Partnership Fund, which has received over $2.5 million (Sh250 million) and we are still expecting about Sh290 million before the end of this financial year.” Mr Mfumukeko said in his New Year message.
In June, the EAC secretariat passed the EU’s fiduciary risk assessment (FRA), the first time in 10 years having failed the test in 2006 and 2008.
The FRA was conducted by London-based consultancy firm, Moore Stephens LLP, which reviewed the bloc’s internal control, accounting records, external audits, procurement and sub-delegation.
The bloc obtained an overall positive score after its accounting system, external audit and sub-delegation were found above board. It’s weak internal control system and poor procurement rules however failed the test.
According to the findings, the bloc is considered as having met internationally acceptable standards for external funding.
A positive score implies that the EU regards the EAC as an organisation that is likely to use donor funds for the intended purposes, properly account for them and give value for every cent contributed.
That means donor funds can be disbursed to EAC organs directly without risk of misappropriation as opposed to the current model where money is released to contractors after work or channelled through civil society organisations.
The bloc is banking on the overall positive rating to unlock billions of shillings from donors in the current financial year.
“I have since July last year signed financing agreements with the EU, Germany, USAid and the World Bank amounting to a total of over Sh30 billion to be implemented over the coming years,” Mr Mfumukeko said, adding that reforms were underway to tighten procurement rules and strengthen internal controls.
Donors finance at least 60 per cent of the EAC’s annual budget with EU countries accounting for the bulk of the donations.
The six member states — Kenya, Tanzania, Uganda, Rwanda, Burundi and South Sudan — are supposed to patch up the difference by equal contributions.
In the meantime, the EAC remains under pressure to apply appropriate rules and procedures in all the parameters of transparency to guarantee a long term relationship with donors.
