East Africans can fund their budget and end dependency

The five-member East African Community is discussing alternative ways of funding the regions development budget, with the major aim of reducing dependence on donations from outsiders. On the table is a proposal to have member-states surrender one percent of the value of revenue from imports to finance development projects in the region, especially infrastructure needed to spur more growth. Currently, member states—both the richer and the poorer—contribute equal amounts to the pool, but this is hardly half the annual budget of the community. That means that most of the resource envelope comes from well-wishers.

The five-member East African Community is discussing alternative ways of funding the regions development budget, with the major aim of reducing dependence on donations from outsiders.

On the table is a proposal to have member-states surrender one percent of the value of revenue from imports to finance development projects in the region, especially infrastructure needed to spur more growth.

Currently, member states—both the richer and the poorer—contribute equal amounts to the pool, but this is hardly half the annual budget of the community. That means that most of the resource envelope comes from well-wishers.

Practically, that means that any development plans discussed as a community depend on the goodwill of foreigners. That is called dependency syndrome. The proposed system is therefore a welcome move that should help the region cure this deadly syndrome and enable East Africans take their future in their own hands.

Moreover, this kind of arrangement will see the bigger economies in the region play their rightful role by contributing a large portion of the resources needed to develop our region as a whole.

This appears to be a tested model that should work well for the region. The European Union uses the same to amass resources to fund its activities and even donate some to us.

Even though it has multiple sources of revenue, the EU’s major source is revenues from imports into the Union. Indeed all import revenue belongs to the EU with member-states only allowed to keep 25 percent of it to cater for administrative costs—such as the cost of collecting the tax on behalf of the Union.

While the EAC is not yet there, the proposal is one good step towards a self sustaining economic and later political union that we aspire to be.

 

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