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Worst
financial crisis hits EAC
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Member
states fail to pay contributions
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February
staff salaries hang in the balance
By Arusha Times
Correspondent
 When
leaders the East African Community member-states comprising Tanzania,
Uganda, Kenya, Rwanda and Burundi are talking tough about forging a
common market and subsequently a federation, their actions do not match
their words.
East African
Community established in 1996 is already facing deep financial crisis
following failure by member states to remit their contributions to the
secretariat in Arusha.
Reliable sources say if the funds are not remitted as soon as possible
the secretariat may fail to meet operational costs at the secretariat,
run some projects and even be unable to pay staff salaries for
February.
The secretariat which has a staff of about 120, many of them
professionals, has appealed to member states with outstanding
contributions to settle them before the situation gets worse.
Statistics availed early this week to Arusha Times indicated that only
34 per cent of $ 23.4 million being EAC annual budget for 2008/2009 had
been remitted to the secretariat.
Juma Mwapachu, EAC Secretary
General
Under the budget proposals approved by the East African Legislative
Assembly in June last year, each partner state, except Burundi, was
supposed to pay $ 5,604,733 to the secretariat mainly to cover the
operational costs of the secretariat and some projects.
However, until yesterday only $ $7,858,651 had been remitted being
contributions by the members with $ 15,643,503 yet to be contributed for
the 2008/2009 financial year.
EAC, a regional bloc made up of Kenya, Uganda, Tanzania, Burundi and
Rwanda, has a combined Gross Domestic Product of $ 41 billion.
According to figures made available, Uganda is the only country which
had settled most of its contributions. It has already paid $ 3.932,971
which is 70 per cent of the total amount it is supposed to contribute.
Uganda, the founding partner state of the Community, currently has an
outstanding contribution of only $ 1,671,765. Tanzania and Kenya owe the
secretariat $ 3,681,326 and $ 3,602, 460 respectively.
Tanzania and
Kenya have so far remitted $ 1,923,407 and $ 2,002,273 respectively
being 34 per cent and 36 per cent of what they were supposed to pay to
the secretariat for the current financial year.
But in a twist of what seems to worsen the crisis facing the regional
body, Burundi and Rwanda have each to date paid no single cent amid
reports that the two countries were still waiting for legal formalities
to become full members of EAC.
Both countries were admitted into EAC on July 1, 2007 and during last
June's EALA budget session, Burundi until recently hit by internal
strife was required to pay only $ 1m as its budget contribution.
Rwanda was requested to pay $ 5,604,733 as Kenya, Uganda and Tanzania.
Senior officials of the five EAC member states who met here recently
described the financial situation at the secretariat as "critical",
needing the quick intervention of the governments.
"If no funds are availed within a month, EAC will not be able to pay
salaries by the end of February," said part of the report which is to be
presented to the Council of Ministers which will convene here next week
to discuss the crisis.
It went on; "Partner states have been urged to settle the outstanding
contributions to facilitate implementation of EAC's planned activities".
EAC secretary general Juma Mwapachu was not available to comment on the
situation as he had been involved in closed door consultations and
meetings with key officials from the member countries in the last two
days.
One senior official who spoke on condition of anonymity said this was
the worst financial crisis to face the Arusha-based regional
organisation since the secretariat was launched in March 1996.
He added that Kenya and Tanzania governments, have been contacted over
the matter and that the delay could be caused by cumbersome
bureaucracies and failure by respective ministries responsible for EAC
affairs to act fast.
The crisis over the remittance of funds to EAC secretariat is likely to
be compounded by conflicting legal positions of Burundi and Rwanda
after they became full members of the regional bloc in July 2007.
The two countries became full members upon ratifying the instruments of
Treaty of Accession and depositing the same with the secretary general
by June 30, 2007 upon which consequently attended all statutory meetings
of the organs and institutions of the Coummunity as full members.
"What is debatable, however, is the date when the full rights and
obligations of Rwanda and Burundi came into force and thus committing
them to meeting full financial obligations to the Community," said a
note which has been circulated to EAC staff.
Article 9 of the Treaty of Accession invokes a strict requirement that
Rwanda and Burundi "shall upon accession be subject to the financial and
budgetary obligations and requirements of the Treaty on the partner
states".
EAC has so far recruited 22 professional staff from Rwanda and Burundi
to work in the secretariat. There are also plans to appoint two deputy
secretary generals from the two states to join three already working
there from the founding members.
The financial crisis facing the regional Community nearly disrupted the
holding of the fourth meeting of EALA's second session which started
in Arusha on Wednesday.
In response to the crisis, the secretariat insisted yesterday that the
financial stress was temporary and that it would not deter the on-going
projects and programmes nor undermine the morale of the staff.
"The situation is not out of hand and is being addressed by the partner
states. What we are going through is not unique at all," said a note
e-mailed to this reporter.
The financial crisis facing EAC secretariat started to emerge last week
in Kigali, Rwanda when the vocal Tanzania's minister for East African
Cooperation Dr. Diodoris Kamala revealed that ministers from member
states have directed that all meetings organised by the secretariat be
held in Arusha in order to cut down costs.
"If a meeting is held outside Arusha, then the host country will have
to meet the costs," he insisted when speaking to this reporter from Dar
es Salaam.
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