EAC chief orders bud­get cuts as deficit bites

The bloc needs $1.28b for its fifth de­vel­op­ment agenda

The East African - - NEWS - By PATTY MAGUBIRA Spe­cial Correspondent

The East African Com­mu­nity has adopted a new pack­age of aus­ter­ity mea­sures as the Sec­re­tar­iat nav­i­gates an acute bud­get deficit. An of­fi­cial doc­u­ment seen by

The Eastafrican in­di­cates that as of end of Septem­ber, the EAC ex­ec­u­tive arm in Arusha had only pock­eted 4.6 per cent of the 2017/18 bud­get con­tri­bu­tions, leav­ing the Sec­re­tar­iat in crit­i­cal liq­uid­ity pres­sure.

The EAC bud­get for 2017/18 stood at $113.8 mil­lion, an in­crease of 12 per cent of the $101.4 mil­lion the pre­vi­ous year. Each part­ner state’s con­tri­bu­tion to the EAC’S main bud­get for the fi­nan­cial year 2017/2018 was $8.4 mil­lion.

The fi­nan­cial dol­drums com­pelled EAC Sec­re­tary Gen­eral, Lib­erat Mfu­mukeko to go back to the draw­ing board and craft new aus­ter­ity mea­sures to mit­i­gate the rip­ple ef­fects of the bud­get short­age.

“At the mo­ment, no ac­tiv­ity can be un­der­taken un­less the fi­nance di­rec­torate con­firms avail­abil­ity of cash,” Mr Mfu­mukeko or­dered.

For the meet­ings that have to be un­der­taken, the fresh aus­ter­ity mea­sures say the del­e­ga­tion must be re­duced to bare min­i­mum and only staff per­form­ing crit­i­cal roles should be al­lowed to travel.

“Nom­i­na­tion for meet­ings must be ap­proved by the Deputy Sec­re­tary Gen­eral Fi­nance and Ad­min­is­tra­tion,” the Septem­ber 27, in­ter­nal memo from the Sec­re­tary Gen­eral to ex­ec­u­tives reads.

Mr Mfu­mukeko also di­rected all the EAC di­rec­torates to iden­tify the crit­i­cal ac­tiv­i­ties to be un­der­taken, while other oper­a­tions are put on hold un­til funds are avail­able.

Tasks that can be done with­out any fi­nan­cial im­pli­ca­tion should be pri­ori­tised, fur­ther reads the memo, di­rect­ing the Deputy Sec­re­tary Gen­eral Fi­nance and Ad­min­is­tra­tion and Di­rec­tor of Fi­nance to en­sure com­pli­ance.

The bud­get deficit re­sult­ing from de­clin­ing donor sup­port notwith­stand­ing, the EAC is in dire need of $1.28 bil­lion to ef­fec­tively carry out its fifth de­vel­op­ment strat­egy. The am­bi­tious strat­egy calls for an an­nual bud­get of $258 mil­lion, up from $130 mil­lion it re­ceives a year.

“The fourth plan was over­loaded due to short­age of funds,” said Mr Mfu­mukeko, stress­ing that agri­cul­ture and job cre­ation was high on the com­mu­nity’s 2016/ 2017 - 2020/2021 de­vel­op­ment agenda.

The Sec­re­tary Gen­eral be­lieves sub­stan­tial in­vest­ments in the agri­cul­tural sec­tor will create jobs for the youth and do away with in­se­cu­rity in the re­gion. The strat­egy also fo­cuses on in­vig­o­rat­ing in­dus­tri­al­i­sa­tion and em­brac­ing tech­nol­ogy and in­no­va­tion.

Ad­dress­ing the EAC De­vel­op­ment Part­ners Con­sul­ta­tive Fo­rum last month, Mr Mfu­mukeko pleaded with de­vel­op­ment part­ners to sup­port the projects stip­u­lated in the fifth de­vel­op­ment strat­egy which aims at sta­bil­is­ing and mak­ing the com­mu­nity com­pet­i­tive enough to be­come lower-mid­dle in­come by 2022.

The am­bi­tions strat­egy calls for, among other things, con­sol­i­da­tion of the Sin­gle Cus­toms Ter­ri­tory to cover all im­ports and in­tra-eac traded goods.

Dan­ish am­bas­sador to Tan­za­nia Ei­nar Jensen called on the EAC part­ner states to re­mit their con­tri­bu­tions to the bloc promptly, warn­ing that the de­cline in fund­ing did not au­gur well with the in­te­gra­tion process.

“With strong com­mit­ments and hope, we will re­sist the chal­lenges and emerge as stronger, truly col­lab­o­ra­tive part­ners,” he said.

Pic­ture: File

An agri­cul­tural expo in Rwanda. In­vest­ments in the sec­tor are a pri­or­ity in EAC’S fifth de­vel­op­ment agenda.

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