Budget crisis could bring EAC operations to a grinding halt

Wednesday July 01 2020

Arusha. The East African Community (EAC) may grind to a halt due to unprecedented financial woes. Already members of the East African Legislative Assembly (Eala) and staff have complained about not being paid their allowances and other emoluments for the past four months.

Within the broader EAC, employees fear morale could go down due to a likelihood of salaries being delayed because of diminishing resources.

Fears abound as the regional organisation begins the 2020/21 financial year today without tabling and subsequently passing its annual budget. 

“We are not in ordinary times,” said the chairperson of the Eala General Purpose Committee, Mr Abdikadir Omar Aden,  on Monday.

 However in a swift response, EAC secretary-general Liberat Mfumukeko confirmed on Mon- day evening that a ministerial meeting would be held early this month to discuss the crisis.

He told a virtual sitting of the House that the EAC Council of Ministers will specifically dwell on the impasse on dues owed to the MPs and the House staff.


The SG’s remarks were echoed by the new Chair of the EAC Council of Ministers, Mr Nsuti Mana- seeh, who said the matter will this time around be addressed squarely.

“The Council has taken the issue of delayed payment of emoluments to the lawmakers seriously and it will meet next week to arrive at consensus on the matter,” he said.

During debate in the House on Monday, Mr Paul Musamali, a law maker from Uganda, said Eala was critically affected by resource scar- city facing EAC compared to other organs.

“Eala does not receive direct funding from the development partners,” he said, calling for the partner states to be consistent in remitting funds.

 Mr Aden said the fact that no formal estimates for 2020/21 fis- cal year have been brought to the House was worrying and prayed for swift intervention of the partner states’ governments The Kenyan legislator added the situation has been compounded by delayed contributions from the six partner states, some with tens of millions of dollars in outstanding dues.

This, he said, has not  only adversely affected the operations of EAC but could lead to delayed implementation of key projects and failure to meet the wage bill.

During  the 2019/20 financial year, the EAC had estimated to spend $109.8 million with each partner state contributing about $8.3 million and the rest by the donors. Tentatively, the EAC’s annual budget for the current 2020/21 year was to be tabled last month (June) but the process was put off for lack of the necessary protocols. These included a ministerial

meeting which was to approve the budget to be followed by the further scrutiny by the responsible Eala committees. The EAC Council of Ministers, a policy organ, Community, could not meet following the deaths of Burundi President Pierre Nkurunziza and that South Sudan minister for EAC Affairs John Luk Jok.

 Mr Aden hinted that the ministerial meeting would set the date for the tabling of the 2020/21 budget. However, he maintained even when a new date is set for tabling; it would take approximately 30 days to complete the initial process.

According to him, the member states owed the EAC a combined arrears amounting to more than $50 million not remitted to the Community coffers as part of their annual contributions.

 The legislators and staff of the EAC organs in Arusha intimated to The Citizen that it was time now for a quick intervention of the Heads of State to halt the nosedive.

 They said the alternative financing mechanism once suggested to address the crisis has largely remained on paper with little prospects it can be rolled out soon.

“It has been a long talk said many times,” lamented Ms Muhia Wanjiku from Kenya, noting that delayed salaries and requisite emoluments of the EAC staff was criminal.

 Dr  Abdullah Makame (Tanzania) said delayed or withheld remittances has scuttled plans for the take off of  the East African Monetary Institute and the EAC Statistical Bureau. The institutions are key for rolling out the East African Monetary Union, one of the four pillars of regional integration of the regional bloc.

Eala members were categorical that they were opposed to borrowing of funds from the EAC Gratuity Fund to pay for the operational services.

They said the measure was likely to “create a new problem” to the fluid EAC coffers although it is on record the option worked once during the past. This is feared may compromise the terminal benefits of retiring employees, such as the MPs who normally served for a period of only five years, renewable once.