The East African Community (EAC) proposed budget estimates for the financial year 2009/2010 has been approved, a senior official of the community has revealed.

The community will spend $54.3 million up from $40.5 million to finance the implementation of the projects and programmes of the EAC for financial year 2009/2010. 

This budget exceeds the previous approved budget by 34 percent, implying that the community is expected to spend more money in the next financial year. 

"The budget was approved with no major adjustments expect more funds were allocated to the East Africa Legislative Assembly (EALA) though these additional funds will come from the Secretariat ,” Monique Mukaruliza , the Chairperson of the EAC  Council of Ministers told Business Times in an interview.

She also noted that in the ending financial year, the Secretariat had to resort to borrowing from the Gratuity Fund and the Reserve Fund to bridge expenses related to salaries and meetings of the EALA.

The community’s legislative body had earlier been allocated $8.6 million in budget estimates for the next financial year.

However following discussions with the regional General Purpose Committee, Mukaruliza said, a decision has been taken to allocate from the Secretariat budget some $0.44 million to fund one activity for each of the seven committees of EALA.

Of the total budget, EAC Secretariat has been allocated $25.6 million, Defence Liaison Unit, $1.9 million, while Customs and Trade has been apportioned $2.9 million.

Mukaruliza who is also Rwanda’s EAC Affairs Minister revealed that EAC partner contributions for the next financial year are expected within 6 months after the budget had been read. However the new entrants of the community-Rwanda and Burundi are expected to pay on a quarterly basis. 

In the financial year 2008/2009, EAC faced financial shortfalls due to generalized delayed remittances of contributions by the partner states.

As a result of delayed remittances of budget contributions by most partner states, the 2007/2008 budget reflects a deficit of $4.86 million. The percentage ratio of remittances to total budget stands at 73 percent.

"Fifty two percent of the budget will be financed by contributions from the partner states while the rest will be funded by donors (48 Percent),” said added.

The five partner states’ contributions towards the budget amounts to $27.9 million, with each contributing $5.5 million.

In the next financial year, the community has prioritised consolidating ongoing EAC regional projects and programmes, specifically the Customs Union and the Common Market that will lay the foundation for Monetary Union.  

It also placed priority on regional infrastructure development, industrialisation, trade and investment. This will take the lion’s share of the budget accounting for 50.6percent of the total expenditure at $27 million.

The Council has urged Partner States to allocate adequate budget resources to underwrite the costs of the integration process.

In order to assure the EAC of adequate resources to meet a growing mandate, progress has been made in proposing alternative financing mechanisms of EAC‘s budget.

A proposal was tabled before the Council of Ministers in September 2008 and Partner States have been urged to submit their views which are still being awaited.

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