As cash strapped EAC fights crisis

ARUSHA - The Minister of East African affairs Monique Mukaruliza has refuted claims that Rwanda has not paid its obligatory annual financial remittances to the East African Community (EAC) Secretariat. 

She made the clarification following allegations by the Secretariat a few days ago that it was facing dire financial constraints as a result of non-payment of contributions from partner States with emphasis on Rwanda and Burundi having not paid ‘even a penny.’ 

On the contrary, the minister highlighted that Rwanda owes no single debt to the secretariat ever since April last year when partner states ratified amendments to the treaty that declared Rwanda and Burundi as legally accepted members of the community.

"Rwanda’s obligation to make the contribution started as soon as all partner States ratified amendments to the treaty, and since that date we have paid over four million US dollars for the financial year 2007/2008 and 2008/2009,” she told The New Times in Arusha, Tanzania.

Records of payments to the secretariat, copies of which The New Times obtained, show that the Government paid the money between February 2008 and February 2009. 

Although Rwanda accented to the EAC treaty in July 2007, this could not oblige her, according to article 150(6) of the treaty, to make any financial contributions until all partner states ratified and deposited the instruments to the EAC Secretary General, which they had all done by April 2008.

The article provides that; ‘Any amendment to this treaty shall be adopted by the Summit and shall enter into force when ratified by all partner states.’ 

In September last year, the Council of Ministers held a meeting and directed the secretariat to make political and legal consultations on the timeframe of when Rwanda and Burundi should have started enjoying their rights and obligations, and thereafter come up with a report that is supposed to be presented to another Council of Ministers’ meeting that will sit tomorrow (Friday).

"I’m surprised that the secretariat didn’t wait for the Council of Ministers to pronounce their stand on this. It instead chose to announce that Rwanda has not paid any single amount to the secretariat,” said Mukaruliza who is also the current chairperson of the Council of Ministers.

She added that the secretariat was only paying attention to Rwanda’s obligations and neglecting the rights it should enjoy, yet the two go hand in hand.

Since its entry into the EAC, Rwanda has overwhelmingly supported the EAC integration through implementing policies that include; acceding to the customs union and removing custom duties for products from partner states, and removal of visa fees for EAC nationals.

Others are; abolition of police roadblocks, ensuring a twenty-four operation for border points.

Financial crisis

EAC Secretary General Juma Mwapachu last week had to brave a barrage of criticism from members of the East African Legislative Assembly (EALA) during a meeting called to discuss the financial woes currently facing the secretariat.

At that time, the Secretary General responded saying that a total of only $11,791,732 had been received as part of the annual contributions of the partner states, out of the $23,419,532 budget for the 2008/2009 fiscal year.

Mwapachu added that despite the quick response of the member states to help save the operations of the secretariat, the situation was still gloomy.

"I am still worried that our operations could stall if all the outstanding funds are not remitted by next week (this week). The situation is serious because we have had to borrow from the gratuity fund to sustain our operations until now,” he told the assembly.

The Deputy Secretary General (Finance and Administration), Julius Tangus Rotich, could not be reached by press time yesterday for a comment on whether partner States had paid up their balances this week.  

Each country is required to pay over $4million to the secretariat, except Burundi which had been allowed to pay $1 million due to a civil strife that affected its economic performance.

Ends