Fast track alternative sustainable funding mechanisms now, EALA urges Partner States

Posted in Press Release

Given the recent financial crunch the Community has undergone, the Assembly is now urging the Summit of EAC Heads of State to direct the Council of Ministers to implement its directive on alternative sustainable funding mechanisms within a timeframe that it (the Summit) shall determine.

This follows a Resolution passed by the Assembly urging the Summit to fast track implementation of the directive on Alternative sustainable funding mechanisms and/or invoke Articles 143 of the EAC against defaulting Partner States in as far as the financial obligation to the Community is concerned.

The landmark Resolution was moved by Hon. Judith Pareno and seconded by Hon. Dr Odette Nyiramilimo. The Assembly further urged the Secretary General of the Community to transmit the Resolution to the Chair of the Summit for inclusion in to the agenda of the November 2016 Summit or at the earliest opportunity when it meets.

The Resolution avers that the consistent default of financial contributions by Partner States has led to the depletion of the EAC general reserves to tune of about US$.6.5 Million to facilitate the activities of the Community.

The Resolution was presented to the House on Wednesday afternoon. However, the Chairperson of the EAC Council of Ministers and Deputy Minister of Foreign Affairs and EAC in the United Republic of Tanzania, Hon. Dr Susan Kolimba, tabled a Motion for adjournment of debate under Rule 30 (C) of the Rules of Procedure. In her explanation, the Minister had sought for adjournment till November 2016 stating that the Council of Ministers was seized of the matter and it was under consideration.

The Motion however did not sail through the House, prompting the Speaker, Rt Hon. Daniel F. Kidega to rule that the substantive Motion be debated to its conclusive end.

The Resolution notes with deep concern that all activities of the Community have come to a standstill or have been disrupted since August, 2016. Activities of not only EALA but other EAC Organs and Institutions have also been affected. Specifically, for EALA are the planned activities of the General Purpose Committee, the Committee on Communications, Trade and Investments, the Regional Affairs and Conflict Resolutions Committee, the Legal, Rules and Privileges Committee and the Select Committee against Genocide and Genocide Denial.

“Other activities include the delayed payment of salaries and payment of EAC suppliers. These have also disrupted all other activities including the ongoing plenary. This is after the Secretary General informed the August House in the 1st Meeting of the 5th Session that he had made substantial savings – are the savings being realized through none implementation of activities? the Resolution says in part.

As at the period of the 34th Ordinary Council Meeting held in August 2016, the total outstanding amount due to the Community by the EAC Partner States according to the Resolution (and a report presented at that meeting) was US$ 45,316,812.

According to a table reproduced within the Resolution, the United Republic of Tanzania and the Republic of Burundi owed the Community arrears to the tune of US$ 356,492 and US$ 5,606,800 respectively. This is in addition to the contribution due for the Financial Year 2016/17 pegged at US$ 8,378,108 per Partner State. Republic of Uganda has paid 26.37% of the current contribution due which equates to US$ 2,209,712 while Republic of Kenya has paid US$ 330,306 out of the US$ 8,378,108, which amounts to 3.94%.

Table: Partner States Budgetary Contributions for FY2016/17 to East African Community

Yesterday, however, Deputy Prime Minister and Minister of EAC Affairs, Republic of Uganda tabled the updated document showing improved liquidity position at the EAC.

The document dated October 12, 2016, indicates arrears by Burundi to have decreased to US$ 2,810,750 besides the contribution due this year of US$ 8,378,108. The Republic of Kenya has paid 28.28%, which amounts to US$ 2,369,509 while United Republic of Tanzania has chipped in US$ 558,287, which is about 6.66% of the total amount. The Republic of Rwanda is yet to meet its quota for this Financial Year.

Table: Partner States Budgetary Contributions for FY2016/17 to East African Community as at 12^th October 2016

The Council of Ministers however has a decision that all Partner States should clear all outstanding balances by December 2016.

According to Hon. Pareno, the Assembly has on several occasions posed priority questions as to the dire financial status of the Community.

“In both January and March, 2016, Hon. Dora Byamukama posed questions on the financial status of the Community and the Chairperson of Council of Ministers in responding to these questions was quick to assure the Assembly that the Partner States would meet the set deadlines for their contributions,” she noted.

At debate time, Hon. Nancy Abisai said the Community was undergoing a rough patch and added there was need for further commitment by Partner States.

“As politicians, we have a duty to bring to the attention of the Community when things are not working. It is good for the EAC (Organs and Institutions) to pronounce itself on the matter. We need to be sure that the activities of the Assembly shall be held”, she said.

Hon. Susan Nakawuki remarked that it is not the intention of EALA to have a Partner State suspended since none had been in arrears for 18 months and said invoking Article 146 of the Treaty may be inappropriate.

The legislator said that Committees had failed to achieve their work targets due to funding gaps. She maintained that it was impossible for the Community to grow at zero percent increase per year given the progress and dynamism of the Community.

Hon. Jeremie Ngendakumana said an important portion of the budget was funded by Development Partners and said the Community was at risk of collapse should they withhold their portion.

“The contribution by the Partner States should therefore be timely and be considered as a priority”, he said. This should be within the regulations as pertained by the Financial Rules and Regulations (Regulation 23) of the Community, he added. Hon. Ngendakumana termed the Motion a wake-up call and said it is necessary for the Partner States to be fully paid up six months from the date due.

Hon. Bernard Mulengani said as an oversight body, EALA needed to point out areas that are not handled well and improvements made. He said the issue of gratuity should be clarified and that sanction of the same was improper. The same matter on utilization of the gratuity was alluded to by Hon. AbuBakr Ogle.

The Secretary General, Amb. Liberat Mfumukeko confirmed the gratuity account was intact and that EAC account has received close to US$ 5 Million dollars over the last two weeks.

The Secretary General assured the August House that the EAC had regularly written letters and visited the Partner States to request for remission of funds.

“I thank the Partner States for responding affirmatively to our requests despite challenges Partner States are facing”, he said.

Amb. Mfumukeko said his administration had also actively re-engaged with the Development Partners and told the House that three agencies had in fact deposited funds into the EAC Accounts.

“I have been to Brussels and to Nairobi in a bid to assure the partners that the reform agenda is back. We have also signed a few agreements that are duly supportive of the integration agenda”, Mr Mfumukeko said.

Hon. Peter Mathuki reiterated it was the responsibility of the Assembly to oversight the Community and this entailed in ensuring its programs are undertaken.

“The Secretary General has given a commitment that there shall be funds to undertake the activities of the EALA and the Community. This is fundamental,” he said.

On his part, Hon. Martin Ngoga, affirmed the EAC was a leading regional economic bloc according to a number of analysts.

“We have been exemplary and must do so even when it comes to sustainability. There needs to be seriousness in managing the affairs and it should be looked at from a bigger dimension. Currently, the state of affairs is sad, we have a big agenda which we cannot implement”, Hon. Ngoga said.

Others who rose in support were Hon. Yves Nsabimana, Hon. Valerie Nyirahabineza, Hon. Dora Byamukama and Hon. Sarah Bonaya. Others were Hon. Mukasa Mbidde and Hon. Emmanuel Nengo.

The Second Deputy Prime Minister and Minister for EAC, Rt Hon. Kirunda Kivejinja assured the House the Council of Ministers was committed to ensuring the obligations of the Partner States are met.