Writes Leo Odera Omolo In Kisumu City
REPORTS emerging from the Northern Tanzanian City of Arusha have painted gloomy picture indicating that the East African Community {EAC} is facing its “worst financial squeeze “in recent history.
This is said to be as the result of its five partner states drag their feet on remitting their annual financial contributions. Fears that some of the community’s earmarked projects and programs may soon be grounded to an abrupt halt due to lack of funds is on the card.
The halting of the flow of contributions has constrained many crucial activities of the EAC executive arms, including the negotiation of an Economic Partnership Agreement {EPA}with the European Union {EU}.
The latest report on the status of partner states contributions before the EAC Finance and Administration Committee held at the secretariat in Arusha on November 17-20 points a worrying picture.
Documents leaked to the press last week shows that the EAC has so far barely received 42 per cent of the member country contributions dues.
Analysis says the issue was likely to feature prominently as the main agenda at the EAC Head of State summit this week. The EAC Heads of States Summit this time around will be held at Ngurdoto Mountain Lodge in located in the outskirt of ArushaTown.
As at November 3,2010, only USD 25,988,192 budget out of the total USD 61,496,740 budget to be footed by the EAC, leaving an outstanding amount of USD 35,508,548.
According to the breakdown, the EAC member countries of Kenya, Tanzania, Uganda, Rwanda and Burundi were supposed to pay USD 12,299,348 each.
Uganda leads the pack with a remittance record of 70 per cent, has already paid a total of USD 9,192,890 leaving an outstanding of USD 3,105,458.
This is followed by Kenya, which has remitted 50 per cent by paying a total of USD 6,138,838 As it stands now, Kenya owes the regional body a total of USD 6,160,510 in arrears.
Rwanda has also honored its financial commitment to the EAC by 50 per cent. The record indicated that Rwanda has so far remitted about USD 6,148,674, remaining with an outstanding balance of amounting to USD 6,150,674.
Tanzania, which is the host of the EAC headquarters, is lagging behind in its payment. It has only paid 30 per cent. According to the report Dar has an outstanding amount of money which stands at a USD 8,669,775 after remitting barely USD 3,669,573 out of the total USD 12,299,348.
Burundi’s case is even worse, because it has only managed to pay 7 per cent of its financial commitment to the regional economic bloc. In real terms, Burundi has only paid USD 838,217 leaving an outstanding amount of USD 11,461,131.
A source at the Arusha-based secretariat of the EAC has said that the EAC is in dire need of funds to undertake its day to day activities as the five partner states have failed to remit their contributions in time.
In October this year, the EAC secretary General Ambassador Juma V. Mwapachuhad said that a new financial mechanism was needed for projects and programs of the EAC to run smoothly.
Due to the slow of contributions from the partner states as well as from the donors and development partners, Mr Mwapachu has told the EAC Council of Ministers that many earmarked projects and programs undertaken by the Community have stalled.
Noting that slow release of funds has constrained the activities of the regional organization, Mwapachu said that the period between July and September every year was the most difficult because member governments started their fiscal year at the same time.
“Being the beginning of the financial year of the partner states, the flow of funds to the EAC is normally slow and with it, EAC’s programs and activities are significantly slowed down” he added.
Ends