EAC BUDGET FOR FY 2009/2010 COMES AT RISING MOMENT OF EA INTEGRATION AND ESTABLISHMENT OF THE COMMON MARKET
EAC Special Feature By Leo Odera Omolo
The EAC Budget for Financial Year 2009/2010 which was presented to the East African Legislative Assembly at its sitting in Bujumbura on 21 May 2009 came at a significant moment when the EAC is marking the 10th Anniversary of its establishment in 1999.
Unlike its predecessor, the first EAC (1967-1977), which had collapsed in its tenth year, the present Community is arriving at its tenth year in a resurgent and celebratory mood. It boasts a combined GDP that has risen to $ 51 billion, up from $ 20 billion in 1999; and a membership that has expanded from the original three members, Kenya Uganda and Tanzania, to the current five that includes Rwanda and Burundi which joined in 2007.
Among the feel good factors that buoyed the presentation of the record $ 54.3 million EAC Budget, under the theme, Strategic Priorities to deepen EAC integration, towards Common Market and Monetary Union, is the good progress of the Customs Union. In its fifth year of operation, since its establishment in 2005, the EAC Customs Union is approaching its maturity. The Customs Union’s 5-year phase down to zero tariff and full fledged Customs Union by 2010 is today on course in tandem with preparations towards the establishment of the EAC Common Market.
Following a directive of the EAC Heads of State, the Partner States are putting emphasis on regional infrastructure development and joint promotion of investments and trade. The Budget presentation could not have come at a time when the regional organization was in better shape.
For a large part of its ten years of existence, EAC had agonized over the need to have its available resources matched with its prescribed lofty ideals and objectives. This moment came in May 2008 during the presentation and debate of the EAC Budget for Financial Year 2008/2009 at the EALA budget sitting in Nairobi in May 2008. The EAC Budget for Financial Year 2008/2009 rose to the $ 40 million mark, up from $ 28.3 million of the previous Financial Year. With that dramatic leap of resource allocation, the EAC was launched on a new trajectory of growth and development.
When presenting the EAC Budget for FY 2009/2010, the Chairperson of the EAC Council of Ministers, Rwanda’s Minister for East African Community, Ms Monique Mukaruliza, was emphatic in observing that the EAC has advanced and internalized a results-based performance and management system, supported by an elaborate Monitoring and Evaluation system. She proceeded to present a Budget performance and projections that was crisp and clear on linkages between strategic organizational objectives, resources and outcomes.
The EAC Budget 2009/2010 marks a watershed of the EAC integration process between the past, (first) decade (1999-2009), of mainly laying the foundation ; and the next, (second) decade, (2010-2020) of focus on concretizing the Community and delivering tangible benefits of regional integration.
The Budget is reassuring on many achievements that the EAC has made during the Financial Year 2008/2009 in the priority areas that were identified, including consolidating the Customs Union; Common Market negotiations; laying the ground work for the Monetary Union; programmes of infrastructure development; and promotion of investments, trade and industrial development.
The Budget is reassuring not only on the progress of the EAC Customs Union but also the advanced stage reached in the negotiation of the EAC Common Market Protocol. The large body of the proposed Common Market Protocol has been agreed. The pending issues now relate to land, use of identity cards; and the right of establishment and permanent residency. The EAC Summit has directed that the pending issues be resolved in time for the Protocol to be ready for signing in November 2009.
Minister Mukaruliza’s report card reflects high scores in the area of EAC investments and trade promotion. Working closely with the East African Business Council, EAC has covered large ground in addressing the critical issue of non-tariff barriers under the ongoing consultations on capacity building and development of mechanisms on non-tariff barriers; and the operationalization in February 2009 of the EAC Competition Act 2006.
The enactment of the EAC Trade Negotiations Act in 2008 was a major breakthrough in the longstanding search for the EAC Partner States’ commitment to negotiate as a bloc in the multilateral trade fora. The EAC’s frontline participation in the Tripartite EAC-COMESA-SADC Arrangement which culminated in the hosting of the first Tripartite Summit in Kampala in October 2008 also earned the EAC many marks. Following the decisions of the Tripartite Summit, the three regional economic communities are already working on the modalities for the establishment of the enlarged Free Trade Area.
The process towards the establishment of Monetary Union and single currency for the EAC region is similarly on course. There is every indication that the process towards EAC single currency and Monetary Union is on course by the appointed date of 2012.
From the Minister’s Budget, one discerns that the focus of the EAC in the period ahead will be essentially two-pronged; on the development of regional infrastructure; and promotion of investments and trade. The first shots in this concretization phase of the Community have been fired with the commencement of the construction of Arusha – Namanga – Athi River road, linking Tanzania and Kenya which is now due for completion in 2011.
The Minister’s budget speech gave indication that new urgency will be placed on sorting out the problems that beset the regional railways network. The railway network is in bad shape despite the concessioning, some two years ago, of the Kenya-Uganda Railways to Rift Valley Railways and the central railway line on Tanzania to RITES of India. On a positive note, an East African Railways Investors’ Conference is planned towards the end of this year to give a push start to the East African Railways Master Plan that seeks to upgrade (and extend) the entire East African railway network.
The Minister, however, held out good prospects for the development of civil aviation following the ratification of the Protocol for the establishment of the EAC Civil Aviation Safety and Security Oversight Agency (CASSOA). This has set the stage for operationalization of CASSOA. Similarly, in the communications sub-sector, concrete achievements could be expected in the medium term when the East African Marine System (TEAMS) and the East African Sub Marine Cable System (EASSy), both projects which are private sector-led, are rolled out in 2009 and 2010, respectively.
Developments under the East African Power Master Plan are also giving positive signs. Energy development and interconnection projects are at various stages of implementation on the ground following the commissioning of the Namanga Cross- border (Kenya-Tanzania) Electrification Project on 28 April 2009. The 4th East African Petroleum Conference on Petroleum Potential and Investment Opportunities was held in Mombasa in March this year and gave further boost to the ongoing oil and gas exploration and development in the region.
Minister Mukaruliza’s budget also gave hints of new areas of priority and emphasis in the period ahead. These include emphasis on Agriculture and Food Security which will involve the launching of the EAC agricultural and rural development strategies and programmes. Emphasis will be placed on addressing food security in the region and also take into account promotion of sustainable utilization and management of natural resources with addressing, as well, the new emerging issues of global climate change.
With regard to the Lake Victoria Development Programme, the Lake Victoria Basin Commission (LVBC) has launched the implementation of its Operational Strategy (2007-2010) around its three key pillars, namely unlocking the vast potentials in the Lake Victoria Basin by maximizing the utilization of natural resources; reduction of poverty and improvement in the quality of life; and environmental sustainability. Lake Victoria is the single most important shared resource of the EAC with a potential gross domestic product in the order $ 5 billion that presents great prospects for growth and development in the region.
The budget is strategic and focused on the emphasis that will be placed on co-operation in the social sectors and political affairs. The Minister made a bold statement that, “the ultimate goal of regional integration is human development. Apart from the practical orientation in pursuing economic growth of our region, we need to develop a conducive environment in which the people of our region would enjoy greater prosperity in greater freedom, liberty and security. This calls for the need to pay closer attention to the aspects of Political co-operation inasmuch as we should do on the Economic and Social co-operation aspects that we are pursuing”.
Finally, the Minister announced that preparations are ongoing for the Observance of the 10th Anniversary of the November 1999 signing of the EAC Treaty. Among the activities of the observance will be the preparation of EAC Vision 2020 that will provide an opportunity for the EAC to set clear integration goals as it launches into the next ten years. Related to this, the EAC Budget has provided for further organizational restructuring, including review of some provisions of the EAC Treaty with a view to making the EAC, as the Minister said, “confident enough, competent enough and decisive enough” to implement regional projects and programmes.
Ends
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Date: Thu, 11 Jun 2009 08:35:40 -0700 (PDT)
From: Leo Odera Omolo
Subject: EAC SPECIAL FEATURE FOR BUDGET AND COMMON MARKET