$1.4 billion budget deficit could ground EAC operations

Several East African Community institutions are unable to meet their financial obligations due to the delays in remittance by the partner states, which has left the Secretariat with a $1.4 billion budgetary hole.

Kenya and Uganda are the ones sustaining the operations of the Secretariat.

The region’s ministers are now pushing for punitive sanctions against defaulters.

During its meeting held in Nairobi in June the East African Legislative Assembly approved the EAC Budget for the financial year 2018/2019, which had been adopted by the EAC Council of Ministers in May this year.

Now South Sudan and Burundi, who have not paid up, are expected to develop a two-year remittance plan on the outstanding budgetary arrears that totals more than $29 million.

In the meeting, the Council of Ministers directed that each partner state was to contribute $8.3 million to the main EAC Budget for the Financial Year 2018/2019, a further $744,436 towards the budget for the Inter-University Council for East Africa; and Kenya, Uganda and Tanzania were to also to contribute $517,011 towards the budget for Lake Victoria Fisheries Organisation.

Outstanding contributions

The regional countries were given up to the end of the year to pay up their outstanding budgetary contributions for 2017/2018.

So far, only Kenya, Tanzania and Rwanda have made this full payment with South Sudan and Burundi still have more than $12 million of their expected remittances for last year’s budget pending.

South Sudan still owes the EAC secretariat $7.37 million in last year’s budgetary contribution while Burundi’s arrears stand at $4.4 million. Uganda has an arrears of $54,495.

At the May meeting, the regional countries were also asked disburse at least half of their budgetary contributions for the current 2018/19 financial year by end of September this year to enable the EAC Organs and Institutions discharge their mandate.

From this directive, Nairobi has so far disbursed 80 per cent or $6.68 million, while Uganda has disbursed 53 per cent or $4.46 million.

Tanzania has disbursed 26 per cent, while Kigali has sent in 25 per cent or $2.09 million.

South Sudan and Burundi are yet to disburse any funds to the Secretariat.

“Uganda, Rwanda and Tanzania informed the meeting that part of the contribution was being processed with the view to pay in full by end of December 2018. Burundi informed the meeting that the arrears would be fully paid before end of this year,” the Council report said.

The Ministers are no considering sanctions against defaulters in a bid to ramp up timely remission of funds.

The EAC 2018/19 budget dropped to $99 million from $110 million in the 2017/2018 financial year, caused by partner states delay to remit contributions.

There has been a 42 per cent decline in contributions received from the development partners compared with the previous financial years.

- The EastAfrican