EAC stifled as donors reduce support over heavy spending

Nairobi. The alleged misuse of funds is said to be the main reason for  development partners to consider further reductions in funding the East African Community (EAC) together with its related organs and institutions.

Sources close to the regional organisation say the donors, who for many years have supported nearly 70 per cent of EAC’s annual budgets, have not been happy over what they deemed to be extravagant expenditure at the Arusha-based body.

The money squeeze, the sources add, could be compounded further by failure of partner states - save for new entrant South Sudan - to remit mandatory contributions for the current financial year in time.

By Thursday last week, outstanding remittances by five member countries in the bloc stood at $32.3 million out of the combined total of $41.8 million for the financial year 2016/17 of which $2.8 million expected from Burundi had not been submitted for the fiscal year 2015/16.

“The donors are not happy with the high expenditure and that is why they have cut down aid in some critical areas,” a source privy to the Community confided with The Citizen on Saturday, yesterday, adding that the donors are irked most by the audit reports of 2012/13 and 2013/14 fiscal years which pinpointed travel expenses as having drained funds.

Among queries raised in a report on Eala’s Accounts committee for the fiscal year ending June, 2014, a whopping $5.1 million was spent on air tickets that were procured under allegedly dubious circumstances.

EAC officials refused to comment over the issue and did not avail statistics. Nevertheless, they admitted that some of donors have scaled down their bilateral and multi-lateral support due to various reasons, including the political turmoil in Burundi.

The hard stance by the donors got a boost from President John Magufuli, the current EAC Chair, who tasked the EAC Secretariat the day he assumed the position stressing that he would not tolerate the mismanagement of tax payers’ money to be spent on none core activities.

The no-nonsense leader immediately got support from President Paul Kagame of Rwanda whose country  is zero-tolerant of corruption. This was later followed by austerity measures taken by EAC secretary general Liberat Mfumukeko since he took over in April this year. 

The tough-talking Burundi diplomat revealed recently that the regional organisation has recorded savings amounting to $588,768 through reducing travel costs alone in his first three months of his administration. Projections are that there would be savings of up to $6 million in the 2016/17 financial year.

Amb Mfumukeko told the House during a session in Zanzibar two months ago that his administration has actively re-engaged with the development partners in a bid to assure them that the reform agenda has started to bear fruit.

Visiting partner states requesting for the remission of funds he thanked them for responding affirmatively despite the challenges they were facing.

Analysts and within the region blame the escalating expenditure on travel as a string of seminars and meetings had been organised over the last two fiscal years.

“It’s unfortunate most of the funding was spent on workshops and retreats,” la mented Simon Mapolu, a business consultant based in Arusha said, adding that the EAC member states  have yet to create a sense of ownership of the Community.

He added that the other weakness was the dependency syndrome, citing the EAC headquarters which was constructed with donor support would cease once development partners decide to pull out.

Traditional donors of the Community are largely European Union (EU) member states, which were also behind the setting up of the EAC Partnership Fund, a funding mechanism  targeted at supporting specific development programmes.

Although comprehensive statistics are not available,  development partners have in recent years reduced their budget support to EAC from around 70 per cent to 50 per cent in the current financial year 2016/17.

During this fiscal year, all the five partner states were expected to have contributed a combined total of $47.5 million while $46.9 million was expected from donors out of an expenditure budget of about $101.6 million.

Development partners were expected to have disbursed $58.5 million to EAC for the last financial year.

There had been a decline in annual budget allocations  for EAC tabled before the East African Legislative Assembly (Eala) over the last few years.

For instance during 2014/15 $110 million was approved. This was $14 million less than budget allocations for 2014/15 that totalled $124 million.

A breakdown of the contributions paid so far by EAC partner states for 2016/17 availed to The Citizen on Saturday indicate that it is only Uganda that has almost met its target, having remitted $7.4m, 89 per cent of $8.3 million  each country is supposed to contribute towards  the current fiscal year.

Tanzania has only remitted $558,287 million  approximately 6.6 per cent while Burundi has not submitted anything, including the $2.8 million it did not send to Arusha for the last budget.

Kenya and Rwanda have contributed $2.3 million and $1.9 million (28 and 24 per cent) respectively.

However, an official of the Secretariat challenged the figures, saying there has been increase in contributions a few days back and that figures keep on changing each passing day.

The contribution for each country is proportionally allocated to the three organs of the Community; the Secretariat, Eala, the East African Court of Justice (EACJ) as well as institutions are funded through the EAC budget.

For Tanzania, out of t $558,287 remitted so far, $246,251 went to the Secretariat, $54,748  to EACJ, $201,829 for Eala $36,868 towards Lake Victoria Basin Commission, $9,000 for the East African Science and Technology Commission and $99,500 to the recently established East African Kiswahili Commission.

Budgetary contributions of $1.3 million and $841,000, respectively, for two new EAC institutions, the East African Health Research Commission (EAHRC) and the East African Competition Authority will be drawn from the General Reserve Account.

Eala which ended its session in Nairobi on Thursday, said it has been forced to cancel some activities, including those organised by its Committees, as it was crippled by a financial crunch.

Eala Speaker Daniel Kidega appealed to member states to finalise their remittances by the end of next month as agreed during a recent session of the EAC Council of Ministers, the policy organ of the Community.

Meanwhile Eala has been allocated $16 million for its expenditure, $69.6 million has been slotted for the Secretariat and only $4.2 million for the East African court.

Jeremie Ngendakumana, a lawmaker from Burundi warned that since most of the EAC budget was funded by development partners, the Community was at risk of collapsing should the donors withhold funding.

The financial situation of EAC did not feature in the just-ended session of the regional Parliament in Nairobi although legislators passed a resolution during their session in Zanzibar in October to the EAC Council of Ministers to implement a directive given by EAC Heads of State on alternative funding mechanisms for the Community.

The resolution avers that the consistent default of financial contributions by the partner states has led to the depletion of the EAC general reserves to the tune of $ 6.5 million to facilitate the activities of the Community.