The East African Community could follow in the footsteps of African Union in its quest to find an alternative financing mechanism, a regional lawmaker has said.
During last year’s African Union Summit in Kigali, the Heads of State adopted a self-financing mechanism, proposed by former African Development Bank president Donald Kaberuka.
The African Union (AU) model aims to raise $1.2 billion (about Rwf898 billion) annually to reduce heavy dependence on external partners to finance Africa’s development projects.
Rwandan members of the East African Legislative Assembly (EALA) say regional ministers of finance are set to meet in Arusha, Tanzania to consider the various proposals on the table and finalise the matter of alternative financing for the bloc.
“I believe the proposals are similar to those put forward by the African Union. We’ve had proposals for a number of years, but the Council requested for more clarification as there were more issues to be considered,” MP Patricia Hajabakiga, the chairperson of Rwandan EALA chapter, told a news conference in Kigali yesterday.
Finance ministers from the bloc start meeting today until May 8 to consider various matters connected with the region’s financial muscles.
During their latest country tour, the lawmakers met and held discussions with heads of key government departments with a direct bearing on the regions integration agenda.
MP Martin Ngoga (Rwanda) said the matter of an alternative financing mechanism for the Community was among the issues they discussed with Finance and Economic Planning minister Claver Gatete recently.
Ngoga said: “The minister told us that a meeting is scheduled soon so that they can discuss and reach a conclusion. The negotiations have been on for long and the minister indicated that there are efforts to make sure that they get to a resolution.”
Currently, to fund activities of key organs of the bloc, including the EAC Secretariat, EALA, and the East African Court of Justice (EACJ), each partner state contributes an equal amount to the EAC Secretariat.
In the past few years, countries have been required to contribute nearly $8.4 million each, but the biggest chunk of the EAC budget continues to come from development partners.
The bloc’s Audit Commission in 2015 raised the need for a sustainable financing mechanism for the first time during the audit of the bloc’s financial statements for the financial year 2003/04.
At the time, the Commission recommended that management identifies the possibilities of securing funds from other reliable sources due to delayed remittances by partner states, an issue that continues to hamper the activities of various organs of the EAC.
The next summit directed the Council to present a report on alternative financing mechanism including the option of one per cent of imports from outside the Community in line with the principle of financial solidarity and equity.