Suspend EAC rules on government debt in fight against pandemic

East African Community Secretariat’s deployment of mobile laboratories and testing kits in 4x4 vehicles in the member states to fight Covid-19 showed its capability.

The vehicles will add to the reach in the far-flung and difficult to reach places, complementing the ongoing effort to establish the extent of the infection through testing. 

 

The Secretariat has also “put in place a Regional Coordination Committee (RCC) with Risk Communication and community engagement; Policy and Guidelines; Finance and Logistics and Data and Statistics sub-committees to oversee the regional COVID-19 response.”

 

In the same vein, the joint video conference of ministers responsible for health and east African community affairs last week underscored EAC’s role in uniting the effort to contain and prevent further spread of the disease in the region.

 

With this, however, there was some disappointment when it seemed not all partner states might be on the same page. 

Reports of Burundi blockading cargo to the country through Rwanda were received with regret, though one may read hope that the country’s health minister attended the regional meeting on the pandemic.

The meeting resolved that partner states should enforce strict screening procedures at all border points in a bid to contain Covid-19 and prevent further spread of the disease in the region.

While the borders remain closed for transit passengers, the meeting directed the partner states to apply multilayer mechanism to implement 100 per cent exit and entry screenings to avoid loopholes.

This includes the free movement of goods and services in the region where the partner states are to implement common surveillance system to monitor health of crew members of trucks, cargo planes and vessels, and enable contact tracing.

In issuing the resolutions, including reiterating ongoing actions such as quarantine, social distancing and joint research, the ministers not only emphasised but underscored their governments’ collective commitment.

Perhaps the ministers could have also recommended suspension of EAC rules on government debt, allowing member states to spend what they need to survive the outbreak as best as they can?

While the debt levels for countries in the region have raised some eyebrows, figures as at November 2019 show that Rwanda, Tanzania and Uganda were below the EAC requirement of 50 per cent debt-to-GDP, while Kenya and Burundi ratios were over 60 per cent. 

I take the example of the European Union which already has temporarily suspended its rules on government debt, similarly to allow the money be used by its member states to allay the effects of the pandemic. 

One nevertheless would hesitate to compare the two regional bodies, given the EU is more developed and fully functional. 

But in wondering whether there is more the EAC could do more, it is evident that it is the nature of regional bodies including the EU to sometimes be encumbered in their role vis-à-vis their member states.

One BBC analyst, for instance, notes the tension between centralising power in "Brussels" (EU capital) vs keeping decision-making with national governments/parliaments. 

She gives the example of public health, which is a national competency and the reason why we've seen different EU countries taking different national measures to mitigate the effects of Covid-19.

She also notes that, when it comes to economics, when wealthier countries like the Netherlands and Germany hear the words "debt-sharing" or "solidarity", what they worry that their voters will understand by that is - "richer EU countries in northern Europe have to foot the bill for poorer ones in the south".

The said solidarity is about “coronabond” which aims at raising funds through issuing shared European debt to lift severely affected member states such as Italy and Spain out of recession. While the coronabond lacks political will in the EU, European Central Bank announced a €750bn rescue package.

The EAC still has some way to go before it reaches the point to even consider issuing a joint bond. Not until the integration pillars are attained, including the region’s single currency, might this be possible.

For now, as the Community works on its heft, the ministers’ meeting called for additional contingency and emergency funds to mitigate the impact of the disease in the region.

The views expressed in this article are of the author.

editor@newtimesrwanda.com

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