The East African Community (EAC) is considering new funding options for its operations. It has proposed to partner states the reduction of one per cent of revenues generated from taxation of imports to the region.
“We are considering alternative funding sources including one per cent contribution from imports”, said the secretary general Dr Richard Sezibera, when asked what the Community was doing to reduce dependency on the development partners for its annual budget.
He said until now, 70 per cent of the EAC annual budget is financed by donors with the five partner states; Tanzania, Uganda, Kenya, Burundi and Rwanda, meeting only 30 per cent of the annual expenditure and development budget.
Sezibera said the proposal to enable the regional organisation to meet its budget obligations from taxing the imports, has been on the cards for sometime but could not explain why it has not been implemented.
When he spoke to journalists in Kampala recently during a series of EAC meetings in the Ugandan capital, the EAC deputy secretary general (Planning and Infrastructure) Dr Enos Bukuku, said the one per cent surcharge on imports would enable the Community to raise up to $ 300 million annually.
According to him, the idea was proposed back in 2004 and that had it been implemented it would have enabled EAC to generate enough funds to implement regional projects as well as meet operational costs like paying salaries.
“It’s possible to do it if the partner states agree on this because it would enable us to have reserve funds which we can also use to invest wisely”, Bukuku said, attributing the delay to bureaucracy and lack of seriousness on the part of some regional leaders on the issue.
He added that EAC was still experiencing problems in getting the 30 per cent budget contribution from the partner states in time, at the start of the financial year which begins on July 1.
“In many cases the partner states delay remitting the funds up to October or November from their national budgets,” he explained.
But Sezibera admitted, during the signing of a 3 million Euro grant from Finland to the EAC in Arusha last week, that the proposal for alternative funding of the Community was not likely to get an extra push after the recent summit of regional leaders in Kampala directed the responsible authorities to work on the matter.
Earlier, the Finnish ambassador to Tanzania, who is also accredited to EAC, Ms Sinikka Antila, called on the member countries in the bloc to increase their budgetary contributions to the Community, saying it was not in the best interests of the people of EA to have 70 per cent of the EAC budget coming from the development partners.
The 3 million Euro grant from Finland will support various regional integration activities through the EAC Partnership Fund.
The Grant Agreement was signed by Dr Sezibera and Finnish envoy Ambassador Antila, making the Nordic country the second biggest donor to the Fund which was launched in 2006 as a basket fund for development projects and programmes from the donors.
In the past, Finland had contributed 6 million Euros. According to the signed agreement between Finland and EAC, the Nordic country will make a contribution of three million Euros.
Source: The Citizen
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