11 June 2016

East Africa: Cash-Strapped EAC Tightens Belt on Expenditure

Cash-strapped East African Community (EAC) has taken stringent measures to reduce expenditure within its organs and institutions.

"The stringent expenditure reforms are with immediate effect", said the secretary general Liberat Mfumukeko who promised to cut down expenditure when he took office in April.

He said the regional organization has been compelled to do so because of liquidity challenges as a result of delays in disbursement of contributions by both the partner states and development partners.

The SG, who is the accounting officer of the Community, said the measures and reforms he is spearheading followed intense consultations of the staff members as well as heads of a dozen institutions spread across the region.

Under the measures, the duration of the technical meetings involving delegates from the partner states and EAC staff would be reduced to a maximum of four working days with the number of delegates from the partner states facilitated through EAC budge not exceeding two.

Likewise, the EAC delegates to technical meetings shall not be more than three members of staff.

"In order to reduce conference costs, where possible, the use of free-of-charge, government-owned facilities should be encouraged while the procurement unit at the Secretariat shall negotiate for corporate conference and accommodation rates in each partner state", Mr. Mfumukeko said.

Under the cost cutting drive, the EAC would minimize the use of hotel and commercial conference centres in meetings involving staff members only or with consultants and shall be held at EAC premises which has some meeting rooms.

Members of staff will only be allowed to be away from their respective duty station(s) for not more than 50 per cent of their time.

Exceptions shall be considered on individual basis provided that the cumulative number of days for a particular month does not exceed 65 per cent of the time. These ceilings exclude days for participation in the East African Legislative Assembly (Eala) and the sittings of the East African Court of Justice (EACJ).

Other measures include cutting down budget on consultancies and ensuring that at least 25 per cent of EAC meetings use video conferencing facility.

Air tickets, repeatedly blamed for the alleged misuse of funds at the Arusha-based Secretariat in the last few years, shall have to be issued two weeks prior to the date of the meetings and be booked based on the most direct route.

Per diems paid on travelling officials and delegates sponsored by EAC will also be rationalized to reflect the financial situation of the bloc.

Mr. Mfumukeko took office on April 25th from Dr. Richard Sezibera warning that it would not be 'business as usual' in his drive to salvage the regional body from the current financial mess.

"Although we have experienced situations of financial instability on regular basis, we never sunk into a deep crisis because our leaders in partner states have always reacted in time", he said during a welcoming party by the staff members of the Community.

He stated that the EAC was currently going through challenging financial times and that forecasts for this month show a deficit of more than $ 11 million.

The situation has been aggravated by failure by development partners, who account for close to 70 per cent of the annual budget, to disburse about 30 per cent of the expected funds two months before the end of the 2015/2016 fiscal year on June 30th.

During the coming (2016/2017) financial year EAC Secretariat, which has come under fire from regional legislators, will get about $ 9m less for its expenditure compared to what it received for the current fiscal year as the Community embarks on cost-cutting due to dwindling support from donors.

The regional Court, too, will receive less next fiscal year while the East African Legislative Assembly (Eala), which has been in the forefront against misuse of funds at the regional organization, will have its budget for 2016/2017 upped to $ 16,034,324 from $ 15,865,646 it received during the fiscal year coming to an end.

If the proposed estimates are approved by Eala, the entire budget for the EAC,its organs and institutions under it will total $ 101.3m for the next financial year which is slightly less than $ 110.6m which was approved for expenditure during 2015/2016.

There has been a declining trend of annual EAC budgets in recent years.For instance, the $ 110.6m that was approved for expenditure during 2015/2016 was $ 14m less than the budget for 2014/2015 which totalled $ 124m.

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