Financing mechanism top agenda of next EAC summit

The forthcoming 17th Ordinary East African Community (EAC) Heads of State Summit, scheduled February 29 in Arusha, Tanzania, will discuss the best sustainable financing mechanism for the bloc, among other things. The summit will be preceded by a weeklong meeting of the EAC Council of Ministers that will take place at the EAC Headquarters in Arusha from February 22. “Top on the agenda is the consideration of reports by the EAC Council of Ministers on: the negotiations on the admission of the Republic of South Sudan into the Community; sustainable financing mechanisms for the EAC; and the EAC Institutional Review,” reads an EAC statement. For the past few years, EAC leaders have been mulling how to find the best sustainable financing mechanisms for bloc’s activities. A directive by the Summit in November 2013 tasked the Council, the bloc’s policy organ, to present a report on alternative financing mechanisms, including the option of one per cent of imports from outside EAC, as one of the ways the bloc could reduce overreliance on donor aid. “The ministers for finance are going to meet early next week and they will advise accordingly on what would be a final solution,” said Innocent Safari, the permanent secretary at the Ministry of East African Community Affairs. Partner states seem to have taken too long to agree on a sustainable financing mechanism for the bloc. Under the 2014/15 Budget passed by the East African Legislative Assembly (EALA), for example, out of the total budget of $124 million, partner states contributed $41.9 million, while $73.2 million came from donors. Imposing a one per cent levy on all imports to the region would generate $310 million for the Community every year. This amounts to nearly three times the annual bloc’s budget and, as such solve for good, the irksome cash crunch often experienced by the EAC Secretariat. EALA’s Dr James Ndahiro, an economist, in a past interview with The New Times, said a financing model whereby each partner state contributes one percent of its import revenue is the best option. The 17th summit will also consider Council reports on: the Model, Structure and Action Plan of the EAC Political Federation; Implementation of the Framework for Harmonised EAC Roaming Charges. Modalities for promotion of motor vehicle assembly in the region and reduction of the importation of used vehicles from outside the Community; and the promotion of the textile and leather industries in the region, and stopping importation of used clothes, shoes and other leather products from outside the region. South Sudan, Somalia bid South Sudan’s bid to join the Community suffered a setback following the mid December 2013 new break out of a civil war pitting forces loyal to previously sacked – and now reinstated – Vice-President Riek Machar against those supporting President Salva Kiir Mayardit. The country seceded from Sudan in 2011 but the ensuing political unrest between government forces and Machar’s rebellion dampened its restoration. Kiir has recently appointed Machar as vice president in a move to restore peace and resolve the country’s deepening economic crisis but it remains to be seen whether the lull will be sustainable. After it became the world’s newest country almost five years ago, South Sudan’s public debt reportedly skyrocketed from zero to $4.2 billion. Apart from South Sudan, the Summit is also expected to deliberate on a report by the Council on the verification exercise for the admission of the Republic of Somalia into the EAC. The troubled Horn of Africa nation submitted its request in 2012 but it continues to be bogged down by the war against the al-Qaeda-linked al-Shabaab terrorists. To become an EAC member, an applicant country’s government must – among other things – adopt policies that harmonise economically and politically with those of the bloc’s partner states. Bloc’s e-Passport While in Arusha, the EAC Heads of State are also expected to launch the new International East African e-Passport (electronic passport), yet another significant milestone towards achieving the integration agenda, during their meeting. EAC’s senior official in-charge of communication, Owora Richard Othieno, disclosed that people in the region will from March be able to access the e-Passports that will help ease their movement in the trading bloc. The e-Passport was scheduled for launch last November but it was postponed to allow more time to airbrush pending issues on the document. Among others, the EAC Institutional Review is critical especially as the Council in April 2009 directed the Secretariat to undertake a comprehensive study and propose institutional reforms to boost efficiency in executing an expanded mandate. Meanwhile, Tanzania’s President John Magufuli is scheduled to hand over the EAC chair to another leader who will be decided by the Heads of State. It was supposed to be Burundi’s Pierre Nkurunziza’s turn to take over Chair but the latter has reportedly turned it down for the time being. editorial@newtimes.co.rw

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Financing mechanism top agenda of next EAC summit