EAC heads meet to sort out barriers

What you need to know:

Financial crisis holding back activities of the East African Community (EAC) likely to feature boldly during today’s leaders’ meeting

Arusha. Top East African Community leaders meeting in Arusha today may finally decide to act effectively on the crippling financial crisis which the regional economic bloc is stoically going through.

The twice-cancelled summit of the regional Heads of State and Government starts here this morning amid persisting budget constraints blamed on accumulated arrears of contributions to the EAC by some of its six member-countries.

Cash crises have often adversely impacted implementation of key projects and programmes, thus critically affecting operations of some EAC institutions. The issue was raised last December by regional lawmakers who called for decisive action on the crises.

Until then, only 34 per cent of $50 million – the total contributions due from the six EAC states this fiscal year – had been remitted. In that regard, Members of the East African Legislative Assembly (Eala) claim that some of the partner states lack political commitment – rather than financial inability – to disburse their contributions in full and on time.

The EAC budgeted to spend $99,770,716 during the 2018/19 financial year, $42.9 million of which was due from the Community’s development partner, while about $50 million would come from the six EAC nations.

Suggestions to penalise the countries defaulting on their budget commitments wouldn’t work because doing so is not within the competence of the EAC organs. The persistent cash crunch facing the EAC is among the key issues to be discussed during today’s summit at the Arusha International Conference Centre (AICC).

“The financial status of the EAC will be formally presented to the regional presidents, who may come up with corrective action,” an official of the EAC Secretariat told The Citizen.

The ministers responsible for East African Cooperation from the member countries ended their four-day consultations in Arusha yesterday. But details of their discussions were not made public.

However, it is believed that one proposal discussed by the ministers on how to effectively tame the funds shortage is to create “a sustainable financing mechanism” that was mooted years ago, and under which funds would be raised through imposing tax on imports entering the bloc. That proposal is yet to be operationalised.

The long-standing issue of non-tariff barriers (NTBs) will once again be raised at the Summit, in seeking to eliminate them. To that end, the Uganda second deputy prime minister and chairman of the EAC Council of Ministers, Kirunda Kivenjija, yesterday called on the regional governments to act strongly against NTBs.