Interest of donors in East African integration wanes

Tuesday November 13, 2018

By Tranquility News Correspondent, Arusha

Development Partners’ (DPs) appetite to finance the East African Community (EAC) budget is slowly, but surely waning, statistics of the bloc shows.

The official document on the status of the EAC integration agenda indicates that the donor’s funds towards the budget of the bloc has been declining over the years, apparently owing to wanting commitment among partner states to the regional integration process.

The DPs have not only been delaying to honour their monetary pledges, but their contributions have also been inconsistent, as they nosedived from 90 per cent in 2011/12 to 43.1 per cent this financial year, the EAC document shows.

In real figures, the donor’s contribution towards EAC budgets declined from $124 million in 2011/12 to a mere $43million in 2018/19 fiscal year.

For instance, the document indicates, the EAC, which received $52.9 million from DPs in 2017/18, has so far pocketed $42.9 million in 2018/19, down from $124.5 million in 2011/12, $86 million in 2013/14 and $59 million in 2015/16.

Summits can come and go, but you need to walk the talk,” the US chargé d’affaires to Tanzania and the EAC, Dr Inmi Patterson.

In 2016/17, the DPS contributed $47 million to the community, a clear indication that they desire to see the EAC partner states bankroll their own integration agenda.

And the EAC partner states’ contributions have, indeed, been sturdily stabilising in the past seven years, albeit with little impact on the budget of the bloc comprising six countries, namely Burundi, Kenya, Rwanda, South Sudan, Tanzania and Uganda.

The document shows that the EAC partner states, which contributed $57.2 million in 2017/18, has so far paid $56.8 million in 2018/19, up from $54.7 million in 2016/17, $52.1million in 2015/16, $46.1 million in 2013/14 and $13.8 million in 2011/12.

The shrinking support among the DPs come when the bloc is in dire need of it to implement its 5th Development Strategy which heads of state penned down during their Kampala Summit in February 2018 along with priority infrastructure and health projects to be implemented in 10 years.

“I am not sure if the budget endorsed in Kampala in February reflects political will,” the US chargé d’affaires to Tanzania and the EAC, Dr Inmi Patterson, told the 2nd EAC-Development Partners Consultative Forum early last week, apparently confirming their resolve.

“Summits can come and go, but you need to walk the talk,” added the US chargé d’affaires, saying if each of the EAC partner states had asked itself ‘big picture questions’, including if it really needed the integration agenda and it could create enabling environment”.

The European Union Head of Delegation to Tanzania and the EAC, Mr Roeland van de Geer, concurred with Dr Patterson, saying, “it all boils down to political will, for sure. We (DPs) can argue, coordinate and facilitate, but partner states have to resolve”.

Mr van de Geer said the European integration process survived the test of time, citing devastating wars, misunderstanding compounded by expansion of partner states from six to 28 and the introduction of Euro, which some still believed to date that it was not the right decision for the bloc.

“It took the leadership courage to surrender sovereignty to the regional body,” he stressed.

The EAC Secretary General, Mr Liberat Mfumukeko, however, assured the DPs that there was a shared consensus among heads of state, with all of them drumming up support for the integration agenda.

Mr Mfumukeko said the same spirit the heads of state showed could also be witnessed within the EAC Council of Ministers and coordination committees comprising permanent secretaries, among other senior public servants.

He admitted, however, that there was a missing link within the public service where the will and commitment shown at political level faded away.

“Political mood sometimes change depending on temporary circumstances and messages of some partner states are construed to be refusal to integration pillars,” he said, stressing that all countries would like to have them.

Mr Mfumukeko reminded the forum that moving goods from Dar es Salaam to Bujumbura or Kigali was an uphill task a decade ago when import tariffs were far from being harmonised.

“Traders are better off now than they were 10 years ago, movement of goods from one country to another has been improved,” the former Burundi investment agency chief executive officer and envoy said.

“Challenges abound within EAC, but the business environment has been improving and some barriers to transport and customs clearance of goods have been removed,” he said.

A former Development Studies lecturer, Dr Gasper Mpehongwa, said the EAC leaders need to rethink on the sustainable mechanism of funding the regional integration agenda, if it would, at all, see the light of the tunnel.

“It’s time they substitute the erratic equal partner states’ contribution-funding model with other viable mechanism like surcharge on trade,” Dr Mpehongwa said.

Traders are better off now than they were 10 years ago, movement of goods from one country to another has been improved,” The East African Community Secretary General, Mr Liberat Mfumukeko.

In fact, the debate on the alternative financing mechanism for the EAC has been on the table at the secretariat since 2012.

The bloc has been negotiating for an equitable formula for determining how much each country contributes to its chest in an effort to meet its budget, 70 per cent of which is provided by donors.

The reflection has been around a member’s contribution should be based on GDP, imports from non-EAC countries, intra-EAC exports or tax revenues, but the most preferred model was imports from non-EAC-countries. Kenya and Tanzania thwarted it.

A team of experts proposed the options and any of them would have replaced the erratic equal contribution system in place.

The EAC secretariat proposed a one per cent levy on imports value for each member state to finance its operations as a way to reduce overreliance on donors to bankroll the trading bloc’s budget.

This model implies that bigger importers such as Kenya and Tanzania would have to contribute more to the regional body.

Rwanda, Burundi and Uganda supported the model during discussions in May 2014, in Arusha, but Kenya and Tanzania were not in favour of the proposal.

Kenya and Tanzania snubbed the deal on grounds that they would both shoulder the lion’s share of the EAC budget.

Going by the 2011 imports data, for example, Kenya would have contributed to EAC $145.11 million, Tanzania $108.06 million, whereas Uganda would have contributed $49.10 million, Rwanda $8.15 million and Burundi $4.33 million.