Community's financial status worrying - Assembly states, calls on Council of Ministers to fasttrack remittances to remedy situation
East African Legislative Assembly; October 4th, 2019: Arusha, Tanzania: The East African Legislative Assembly once again wants the East African Community Council of Ministers to address the dire financial crisis, the regional bloc is in. Critical to the matter is the need for all Partner States to duly remit their financial obligations in a timely manner and fashion. Particularly, the Assembly has recommended that the Council of Ministers should consider invoking Article 143 or 146 to impose sanctions against Partner States that default on payment. Particularly, one Partner State, the Republic of South Sudan is been urged to comply by end of October 2019.
As the matter came under scrutiny, the House commended the Republic of Uganda for honouring its contribution for the Financial Year 2019/20 to the tune on 72% as at October 2nd 2019. EALA urged other Partner States to emulate the Republic of Uganda by complying with regulation 23(5) of EAC Financial Rules and Regulations. Consequently, EALA also wants the Alternative Financing Mechanism finalized and effected and a reconsideration and removal of the zero budget increase ceilings.
The Assembly’s debate follows a petition filed by the regional Civil Society Organizations under the aegis of the East African Civil Society Organizations Forum (EACSOF). EACSOF had in the petition made a number of prayers for consideration by the Assembly on matters it deemed of concern to itself and citizens of the region. The petition signed by acting Executive Director, Martha Makenge, avers two critical matters; on the implementation of the budget of the EAC after being passed by EALA and assented to by the Summit and on the implementation of the Customs Union and the Common Market Protocols with specific focus on implementation of Article 24 of the Customs Union Protocol (on the EAC Trade Remedies Committee).
Chief among the prayers of the petition signed by the Acting Executive Director, Martha Makenge, was for Council of Ministers to recommend to the Summit of EAC Heads of State to invoke article 143 and 146 on Partner States that have met the criteria of activation of that particular article. The EACSOF is further considering filing a legal suit with the East African Court of Justice (EACJ) on interpretation of Article 143 of the Treaty and why it has not been invoked in such circumstances that are detrimental to EAC”, the petition reads in part.
EACSOF further tasked the Assembly in its petition to question the Council of Ministers as to why some Partner States had not cleared the arrears of 2018/19 and that until the first quarter of 2019/20, there were yet to be any remittances. The petitioners therefore sought clarification to know if the failures to pay were tantamount to display of no commitment to the integration process.
The EACSOF Chief Executive further remarked that as the first quarter of 2019/20, only the Republics of Rwanda and Uganda had remitted their dues for the Financial Year 2019/20. The petitioners are therefore concerned if the inaction of the other Partner States, whose remittances were yet to be received as at today, was an indication of less commitment to the integration process.
The petition also questions the Office of the EAC Secretary General on the actions taken with regards to remittances and implementation of Article 24 of the Customs Union Protocol; and why no public statement(s) with regards to those two matters have been undertaken.
The petitioners informed the Assembly of their constant follow-up of issues of interest to themselves.
On implementation of the Customs Union and Common Market Protocols, the EACSOF raised the fact the sustained existence of Technical Barriers to Trade (TBTs) and Non-Tariff Barriers (NTBs) was duly affecting trade.
“EACSOF has been constantly following up the integration process of the EAC, with particular interest of observing the implementation of the EAC Treaty, Protocols, Laws developed in EALA as well as Policies, Strategies, Plans and Programs”, Mrs Makenge said in the petition.
Upon receipt of the petition, EALA Speaker, Rt Hon Ngoga, forwarded the same to the Committee on General Purpose as stipulated by the Rules of the House. The Committee thereafter interacted with the officials of the EACSOF and the EAC Council of Ministers. The Chairperson of the GPC, Hon Abdikadir Aden then presented the report of the General Purpose Committee on the subject matter as the House got underway.
At debate time today, Hon Makame said the matter of elimination of NTBs was critical and is provided for under the EAC Treaty and the Customs Union Protocol. “The issue of elimination of NTBs and trade disputes are provided for and the matter is crucial for East Africans to trade and matters to do with trade disputes are resolved”, Hon Makame said. I am convinced the Council of Ministers has agreed to take remedial measures”, he added.
Hon Maryam Ussi had sought an answer if there was a substantive Council Member from Republic of South Sudan given the prolonged absence of the Minister from the Assembly. In response, the Speaker declared the matter not applicable for determination as the Minister from South Sudan, was yet to be sworn -in and therefore not subjected to the Rules of the House at this point in time.
Hon Kasamba Mathias said whereas the Community appreciates the remittances of funds due by the Partner States, the consistent delay was worrisome. He said the current budget performance stands at 59% and wondered whether it was prudent to continue planning for support of 100% of all activities. “We need to find out why the Republic of South Sudan is not paying”, Hon Kasamba said. “I support the motion to give them the month-long deadline to show commitment to the integration process. What timelines should we give the Minister for EAC from Republic of South Sudan to be sworn in? he posed.
Hon Rose Akol said the Community had done a lot to bring peace to the Republic of South Sudan. “I want to commend the South Sudan Chapter of EALA for attempts they have made to make follow-up on the issue of remittances, she said. “Due to no funds the Community is failing to honour its obligations”, the legislator said, adding that the Court (East African Court of Justice) was unable to hold its cases – thereby delaying justice. “With all the provisions of the EAC Treaty, why is there failure on the part of the Council of Ministers to take any course of action? Hon Akol wondered. “If the sanctions are to be in place, then I see a situation where Republic of South Sudan citizens in the Partner States may be in a precarious place with regards to enjoying the accrued benefits.
Hon Kennedy Mukulia appreciated the courtesies so far extended by the EAC to the Republic of South Sudan and said sanctioning was not an option citing the case of Greece crisis in the European Union. “The Country should be urged to comply”, he said.
Hon Wanjiku Muhia sought to be informed about the level of commitment of the Republic of South Sudan in the Community. “The matter is nothing personal – but for the good of the EAC”, she said. The legislator rallied the EALA to continue with its debate and oversight mandate to ensure the EAC realizes its objectives. “I plead with the front-bench (Council of Ministers) to give us the answer to unlock the impasse”, she said.
Hom Kim Ghai, said sanctioning the Republic of South Sudan would jeopardise the country’s gains including the quest for peace. He further mentioned that it was important for Members to give South Sudan time. “While South Sudan rejected the option to join the League of Arab nations, it is interested in remaining within the EAC fold. “Sanctioning the country will not solve the problem”, he said. He recommended that the Chair of the Summit and the Summit Members reach out to the President of the Republic of South Sudan and sort the issue. The legislator also asked the Council of Ministers to hold the next meeting in Juba and emphasise the need for remittances.
Others who supported the motion were Hon Fancy Nkuhi, Hon George Odongo, Hon Mary Mugyenyi, Hon Fatuma Ibrahim.
In response, Hon Adan Mohamed, Cabinet Secretary, Ministry of EAC Kenya said the Council of Ministers would study the recommendations of the House. He maintained that Council of Ministers expects that a report on the Alternative Funding mechanism shall be on its agenda before the next Summit of EAC Heads of State in November, 2019. The report is also expected to address the current policy of zero budget increase ceiling. “The Council is aware that once concluded, the alternative funding mechanism will be a solution to the financial challenges. Council will continue directing Partner States to remit the finances in a timely manner”, CS Mohammed said.
The Hon Minister informed the House the Sectoral Council of Ministers responsible for EAC Affairs and Planning at its 24th Meeting directed the EAC Secretary General to make proposals on sanctions that can be imposed on EAC Partner States that breach the Treaty in line with Article 143.
“The Secretariat has already prepared a draft Schedule of Sanctions to be applied automatically which are still under consideration. The draft Schedule of Sanctions goes beyond the non-remittance of financial contributions to other breaches of the Treaty”, the Cabinet Secretary stated.
NOTES TO EDITORS
Article 143 of the Treaty for the Establishment of the East African Community states that
A Partner State which defaults in meeting its financial and other obligations under this Treaty shall be subject to such action as the Summit may on the recommendation of the Council determine.
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About the East African Legislative Assembly:
The East African Legislative Assembly is the Legislative Organ of the East African Community. Its Membership consists of a total of 62, of whom 54 are elected Members (9 from each Partner State) and eight ex-officio members (the Ministers responsible for EAC Affairs from the Partner States, the Secretary General of the Community and the Counsel to the Community).
The East African Legislative Assembly has legislative functions as well as oversight of all East African Community matters. The enactment of legislation of the Community is put in effect by means of Bills passed by the Assembly and assented to by the Heads of State, and every Bill that has been duly passed and assented to become an Act of the Community and takes precedent over similar legislations in the Partner States. EALA has to date passed 80 pieces of legislation.