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PUBLISHED ON May 25th, 2015

EAC should face up to budget crunch

At the best of times, the East African Community (EAC) Secretariat staff in Arusha would wish for more than the $110 million regional legislators are debating at present.

Notably, the budget for 2015/16 is about $15 million less than the previous one of $126 million passed in financial year 2014/15.

Paying for important EAC Secretariat programmes is perhaps the most nagging problem before the Partner States and as yet no definite solution has been presented.

There is so much to do, but limited financial resources require that many vital programmes are left on the shelf until the cash is in hand.

As closer regional integration becomes stronger, the importance of the Arusha Secretariat becomes just as crucial. For the present, Development Partners like the European Union (EU), have been quick to give a helping hand. On bilateral terms, Germany even paid for construction of the EAC headquarters. In other areas, other countries have been offering grants to push the regional integration agenda forward.

But as most would agree, this kind of arrangement is not sustainable. The EAC must increasingly fend for itself if it is to be taken seriously as a viable economic bloc.

According to the official stance, the Vision of EAC is a prosperous, competitive, secure, stable and politically united East Africa; and the Mission is to widen and deepen Economic, Political, Social and Culture integration in order to improve the quality of life of the people of East Africa through increased competitiveness, value added production, trade and investments.

These ideals were crafted by us-East Africans. Putting your money where your mouth is a basic part of fullfilling these great ideals. Obviously, the first place to start, is the Partner States themselves. They will have to increase their annual contributions and not only that, make sure that the money is paid up on time.

The EAC Secretariat is not for-profit institution, so any reluctance to ask regional citizens to contribute more should not be taken as a burden. Instead, it should seen as a further sign that we are committed to the Common Market currently evolving. How to do it is another issue.

Presently each country deducts an agreed portion of their national income then passes it on to common fund. This formula needs a review.

It is also time to look at other sources, especially areas that have benefit from the oversight role that the EAC Secretariat has. For instance, the Single Customs Territory would not be so effective without the policy implementation provided by the Secretariat and its associated organs.

Why not look into having the Secretariat budget gaining from import duties on products from outside the EAC? The advantage here, is that this money would be constant as opposed to the current situation where the Secretariat gets a one-off disbursement. The EAC is soon coming out with a Competition Law. This is also an opportunity to impose fines imposed when businesses fail to comply.

In the EU, they have formulated the principle of solidarity and ability to pay – though the amount may be adjusted to avoid over-burdening particular countries. No reason why the EAC cannot do the same.

Of course, there will always be the feeling that those who contribute the most cash to the Secretariat should wield a bigger clout when it comes to major decisions swinging their way. To say you will not do it is easy. Finding yourself doing it, compromises all the hallmarks of the East African Treaty.

That is why within the forseeable future, it would be very sensible for the Heads of State Summit to discuss the issue in more detail. No one wants lopsided economic growth. Nor should we continue operating as if the Development Partners will always be on hand to bail us out.

As the EAC economy grows, so do the responsibilities of the Secretariat. It is only logical that we agree to raise its funding.

Source: East African Business Week

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.

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