New EAC budget silent on Rwanda, Burundi contributions
There was nothing mentioned about financial contributions of new East African members Rwanda and Burundi as the Community unveiled a $28 million budget for the financial year 2007/’08 in Kampala, Uganda yesterday.
Tabled by the EAC Council of Ministers before the East African Legislative Assembly at Uganda parliamentary chambers, the Community’s budget cut dependence on foreign aid and tightened on resource wastage. The session was presided over by EAC Speaker Abdirahin H. Abdi.
Community puts 2007/’08 budget at $28m, increases MPs’ pay The budget estimates reflect an overall increase of 26 per cent inconsideration of donor aid. The Council also instituted measures of cost savings. A zero growth budget has been imposed in respect of the pre-existing operations, with savings of $1m.
In his budget speech, the Eriya Kategaya, Uganda’s Minister for East African Affairs, said $14.5 million has been allocated to the Community Secretariat; $696,276 to the Defence Liaison Unit; $1.5m for the Directorate of Customs and Trade, and the EALA will receive $6.4million.
In addition, the East African Court of Justice has been allocated $2.3m and the Lake Victoria Basin Commission $2.9m.
The budget, to be financed by miscellaneous income of $39,563, revenue float of $662,180, donor aid amounting to $6m and equal contributions from partner states of $4.3 each of the five, suggests an increase in the Community emoluments. Shortly after the budget presentation, Ambassador Julius Onen, the EAC deputy Secretary General, told journalists that legislators’ salaries would rise from $2,200 to $3,300 each per month arising from a “continuous review exercise”.
The payments will cater for months beginning June 5 when the new lawmakers were sworn-in. Rwanda and Burundi, both of which acceded to the EAC Treaty on Monday, are yet to elect their MPs to the EALA. But Lydia Wanyoto, a Ugandan legislator said the increase in emoluments cut across the board. “It was spread to all institutions including the Secretariat, Court of Justice and the Lake Victoria Basin Commission. In fact the Secretariat staff salary rise was effected in January this year from a supplementary budget,” Wanyoto complained.
From the budget proposals, which Onen described as “very balanced budget that reflects major activities in the past and the future projects and programmes”, East Africa seems determined to reduce reliance on aid. The deputy Secretary General said the Community had cut donor funding from 11% last financial year to less than 8% this current financial year.
“This has been and will be sustained because of the political will exhibited by leaders of the partner states,” he said. Onen added: “We want to be self reliant and manage our resources prudently. We have enhanced salaries without seeking addition funding. Instead we have cut on the excesses.” The EAC chief also said contributions by member states would be debated since their economies are not at the same level. He said the proposal on the “alternative source of funding” has been submitted, and that the Council of Ministers is yet to consider it for debate. Should the proposal be accepted, contributions of the partner states would vary according to their economies. That implies that Rwanda and Burundi’s contributions would not be equal to those of Kenya or Tanzania. Part of the budget will also be used in the sensitisation of East Africans on the Community. In a report, the Council of Ministers earlier in the week expressed concern that majority of the people were ignorant of the Community. An EAC Partnership Fund, including the EAC Re-branding Project, which is intended to revamp the EAC Marketing and publicity effort are to be supported under the proposed budget.
In the budget, it is also announced that works on the Mombasa-Katuna road (Northern Corridor) and Dar es Salaam-Mutukula road (Central Corridor) were contracted out and would be completed in the next two years. Further, construction of the Arusha-Namanga -Athi River road project is planned to start in July this year. Ports of Mombasa and Dar es Salaam as well as those of Kigoma and Bujumbura have also been catered for under the 2007/08 budget. Kategaya also announced that the construction of the EAC headquarters in Arusha will start in September 2007 and will take 21 months to complete.
The African Development Bank, according to the budget estimates, has extended a grant of $5.5m to the Community to support feasibility and design study for the Arusha-Holili-Taveta-Voi; and investment preparations for the Tanga-Horohoro-Malindi road.
Kategaya also revealed that the World Bank has consented to be the lead agency for the co-operating partner states and will work with the Secretariat to raise resources for the creation of a Regional Power System with the creation of a Power Pool as a central feature in seven years.
The implementation of the Power Master Plan will cover both power generation and transmission projects at an estimated cost $1.2bn and $600m, respectively.
Kategaya further presented that EAC would continue to pursue the comprehensive regional strategy on scaling access to Modern Energy Services under the auspices of the UN. “The main objective of the programme is to ensure that at least 50% of EAC’s population will access modern energy services by 2015,” he said. Again, on infrastructure, this financial year the EAC will retrace its civil aviation vision that had collapsed in 1977. It will be the first sub region in Africa to jointly establish a regional civil aviation safety and security oversight framework as recommended by the International Civil Aviation Organisation.
Kategaya said the systematic promotion of Infrastructure development in the region is intended to create employment and stimulate higher productivity and investments.
The successful growth of the Community, which is acknowledged by the European Union as one of the best on the African continent, is reflected in the East African Development Bank’s performance.
Kategaya claimed that the Bank’s financial performance improved with net profits rising by over 100% in each of the last four years through issues of bonds, administration of lines of credit and cross-currency swaps. “The Bank is now engaged in discussions with the African Development Bank for an eighth line of credit of $120m and is finalising negotiations with the China Development Bank for a $30m line of credit,” he revealed.
However, the Ugandan minister noted the delay in the implementation of the East African Submarine Fiber Optic Cable System telecommunications project.
The budget estimates also indicate that the Common Market would be realised earlier than the set target date of 2010.
A consultants study, commissioned towards the end of last year on the establishment of the Common Market, has been presented in the first draft form. The draft is being subjected to discussions and inputs by the broad spectrum of stakeholders.
Kategaya said in future the East African tourist boards would jointly promote and market the sector to the Asian, Far Eastern and American markets.