The East African Community is in the grip of financial
distress due to failure by some partner states to honour their financial
obligations.
The Ministry of EAC and ASALs says there are “substantial”
outstanding subscriptions by a number of partners states.
This has constrained the community’s ability to implement
programmes that benefit citizens, it adds.
The findings are in a report on Kenya’s progress, challenges and opportunities in the EAC. The report was presented to the Departmental Committee on Defence, Intelligence and Foreign relations by EAC CS Beatrice Askul.“Implementation of community decisions remains inconsistent across the region, thereby limiting the effectiveness of regional initiatives,” the report says.
“Furthermore, some partners states have been slow to
domesticate EAC protocols and directives, creating uneven implementation that
reduces benefits for citizens.”
Askul told the committee that some states are not remitting
as per the procedures provided in the EAC treaty and the protocols.
“Most of these rules were made by the founding members and need amendments,”
she said.
“If a partner state is not paying and there are no sanctions,
then what becomes of it? What becomes of those who are compliant? But I
understand this is an ongoing conversation among the attorney generals in the
EAC to see the provisions that should be amended.”The CS said the money that is available is what is
distributed to the entire structure of the EAC, which is often inadequate.
Among the states she noted were not up to date are the DRC, South Sudan and
Burundi.
Baringo Central MP Joshua Kandie had also raised concerns over reports that Eala legislators were not convening, which Akul attributed to the cash constraints.Under the EAC Treaty, each of the eight partner states is required to remit $7 million annually to sustain the community’s budget, which stood at close to $100 million for the 2024-25 financial year.
The latest figures from the secretariat show that Kenya, Tanzania and Uganda are the states keeping the bloc afloat.
Kenya has fully paid its dues and cleared its arrears, while Tanzania has also
settled its contribution with only a minor balance of about $122,000
outstanding.
Uganda has gone a step further, slightly overpaying its dues by about $153,000, effectively clearing previous shortfalls.
Rwanda has paid roughly three-quarters of its current-year obligation, leaving
an outstanding balance of about $1.8 million.
Somalia, which only joined the EAC in 2023, has managed to cover half its
subscription, with about $3.5 million still pending.
The situation is far worse for Burundi, South Sudan and the
DRC, which have accumulated some of the largest arrears in the bloc’s history.
Burundi has only remitted about $1.3 million, leaving arrears
estimated at $15.8 million, while South Sudan has paid less than 10 per cent of
its dues. It has an outstanding bill of about $15.1 million. The DRC has so far
paid just $1 million, leaving $20.7 million unpaid.
Askul said Burundi has argued during council meetings that there was an agreement that they pay their dues in their local currency, while the treaty requires subscriptions to be in dollars.
The EAC secretariat has warned that the crisis is not only
crippling the functioning of the East African Legislative Assembly but also the
East African Court of Justice.
In July, Eala was forced to suspend several sittings due to a lack of funds,
while staff at the secretariat in Arusha have endured salary delays.
Former EAC Secretary General Peter Mathuki, who is now
Kenya’s Ambassador to Russia, last year cautioned that the secretariat could
not deliver on its mandate without predictable and timely financing.
“The community cannot function effectively if partner states do not honour
their commitments,” he told the Council of Ministers.
“We need predictable and timely financing to deliver on our mandate.”
Donor support has in recent years filled part of the financing gap, but
observers warn that overreliance on external partners undermines the bloc’s
autonomy.
The situation has become even more precarious with the
admission of Somalia and the DRC, which adds to the financial obligations,
while existing members are still defaulting.
Officials accompanying Askul also noted that some countries are in areas that
have been facing security and stability challenges.
The
Council of Ministers has proposed a raft of measures to deal with defaulters,
including naming and shaming the worst-performing states, imposing penalties,
sanctions and potentially restricting voting rights for persistent
non-compliance.
