20 January 2013

East Africa States in US.$12 Million Arrears

Arusha — The East African Community (EAC) council of ministers have directed the partner states to comply with the council directives to always effect their contributions to the EAC budget during the first half of the financial year.

According to a report by the EAC secretariat finance and administration committee, the partner states by November 21st last year were in the arrears of over $12m as contributions towards organs and institutions of the community.

The report revealed that it was only Rwanda that had paid all her contributions while Tanzania had a balance of $3.6m, Kenya had $3.4m, Uganda had $2.5m while Burundi had $1.03m totaling to $11,574,254.

It adds the partner state of Kenya had an outstanding contribution to the EAC secretariat totaling $514,205, Tanzania had $844,490. Uganda had a balance of $1,779,482, Rwanda had $1,795,382 while Burundi had $2,421,883, all partner states had paid contribution of 1,521,699.19 out of 3,714,160.00.

The report stresses that the council was informed that the Community was experiencing operational challenges under current budget framework including the following delays in undertaking several activities.

"Under the current framework, budget control is at the input/account code level for example Air tickets, daily subsistence allowances (DSA) and conference costs among others.

Managing a budget at this level with zero flexibility is not practical in the sense that a budget is an estimate prepared on the assumption that there will be no changes in the environment," said the report seen by East African Business Week.

The report adds that this means that if there is any change in any of the inputs into an activity, that activity cannot be implemented until the Council approves the reallocation.

The result is that such an activity will have to wait for Council approval before implementation.

Given the way EAC operates, the Council usually sits at intervals of four to five months.

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