Some members of the East African Legislative Assembly (EALA) are pushing for the establishment of a sustainable funding mechanism for the East African Community (EAC), in order to address the current very limited financing of the block’s activities including deepening regional integration.

They made the observations on Tuesday, October 25, while speaking to The New Times as the EALA Session opened in Kigali. EALA has convened in Rwanda from October 23 through November 5, 2022.

They argued that the current situation where the East African Community (EAC)’s budget has continued a downward trend, despite the block’s ambitions to deepen regional integration and economic prosperity, is a paradox.

MP Paul Mwasa Musamali told The New Times that whereas EAC Partner States are increasing their budgets, the contributions towards the Community are declining.

EAC’s budget in the current fiscal year 2022/2023 is almost 30 per cent less than that it was allocated eight years ago.

This regional block was allocated $130 million in the fiscal year 2013/2014, a budget envelope that underwent cuts to reach only $91.5 million in 2022/2023, according to data from the Community.

"This is a serious challenge in terms of running activities of the East African Community,” Musamali said.

On the reasons that are put forward for the limited budget to the Community, he said they [EAC Member States] argue that they have more priorities to attend to in their countries in terms of [responding to] disasters, and socio-economic development.

"The solution is for EAC Partner States to come up with a sustainable funding mechanism, where, for example, a particular percentage of money is deducted say from particular taxes on imports or exports so that such money is remitted directly to EAC, other than the money coming from the budget [of EAC Partner States],” he said.

Musamali observed that if the money comes directly from their [national] budgets, "they will divert it for the purpose of their priorities”.

Elaborating on that funding proposal, he said that it is the EAC Secretariat that has to come up with a formula, and then it is agreed upon by the Heads of States.

"For example, you can say that you will be deducting 0.05 per cent of all [taxes levied on] luxury imports to every country, .., then such money is remitted to the Community,” he said citing perfumes, cigarettes, whisks and wines as targeted products.

MP Fatuma Ndangiza said that apart from some EAC countries not remitting their dues (contributions) in good time, to finance the region’s activities, the funding to the Community is small, pointing out that the regional block should not have reliance on donor funding on for certain sectors such as peace and security programmes.

"One of the challenges in all our oversight missions is that most of our institutions are underfunded. And if you can look at the trend, every year, there is a reduction,” Ndangiza said, suggesting that the EAC countries should think out of the box and come up with a sustainable funding model, suggesting a deduction from taxes collected on goods.

"We hope through those two mechanisms, going forward; if all Member States continue remitting their contributions in time, and that’s our call to all member States, but secondary, for the Council of Ministers to encourage Member States to fast track the sustainable mechanism that has been in the pipeline for some time so that we are able to fund the programmes of our growing Community,” she said.

MP George Stephen Odongo said that as a member of the budget committee of the East African Legislative Assembly, he finds it a contradiction that they have ambition to grow as a Community and yet, at the same, they continue to decrease budget and financial commitments to the Community.

"The ambitions of any organisation can be seen by its budget, because growth means financial commitment. For the last five years, we have seen a declining trend, ... and yet, every single year, we have seen additions of institutions, we have seen new pieces of legislation coming in, which means creation of institutions and agencies to implement those laws and policies that are in place,” Odongo said.

"We as an Assembly, have been treated to so many excuses, we have been treated to so many proposals. One of them was that the Community was coming up with an alternative financing mechanism, something [like] that the African Union discussed and passed and it is already implemented, but [for] us as the Community, it has continued to be a debate and that debate has delayed on for over 10 years,” he said.

EAC is a regional intergovernmental organisation of seven Member States, comprising Burundi, DR Congo, Kenya, Rwanda, South Sudan, Tanzania and Uganda.