The
East African Community remains the most integrated regional economic
community in Africa. It, however, has an Achilles heel in the defaults
to financial obligations by its member states.
The delay or failure to honour their commitments has now been called out by the East African Civil Society Organizations’ Forum (EACSOF). EACSOF has observer status at EAC.
Its petition last weekend to the speaker of the regional legislative assembly (EALA) is calling for strong measures to ensure financial compliance. It suggests the EAC treaty should provide sanction as drastic as suspension of defaulters among other possible measures.
It is easy to see why. Article 143 of the EAC Treaty which is about enforcement of rules is bland and, as someone noted, “appears to only threaten sanction on errant members.”
Its reads in full: A Partner State which defaults in meeting its financial and other obligations under [the] Treaty shall be subject to such action as the Summit may on the recommendation of the Council, determine.
There have been serial defaults and payment delays by member states. Evidently, the article’s spirit and intent to punish does not seem to have been summoned.
The result of this is quantifiable. Were the six EAC partner states regularly remitting the obligatory annual contribution of $8.4 million each, the secretariat would have been collecting a total amount of $50.3 million per year.
The rate of compliance falls far short. During the 2018/19 financial year, for instance, the members remitted $29.7 million as of June 2019, amounting to 59 per cent of the expected total.
None of the EAC countries has fully paid on their 2018/19 obligations. Kenya at over 95 per cent paid still has some balance, followed by Tanzania (89 per cent paid), Rwanda (87 per cent) and Uganda (76 per cent).
Burundi has paid 5 per cent ($408,584) of the obligatory $8.4 million for each member state.
South Sudan had paid nothing as of June 2019 to fulfil its financial obligations. The country owes $19.3, being this year’s payment and accumulated arrears.
South Sudan would be the first casualty should the suspension rule be adopted. Burundi would be in a precarious position.
For now, as to why provision under Article 143 may not have been applied, we can only speculate. One could argue that one of the reasons may have something to do with the socio-economic and political situation in the region.
Aside from expulsion, suspension from the Community is the fullest sanction possible, and perhaps the most effective.
But, as a likely solution, it is doubtful it would be politically or even morally possible at this time.
South Sudan presents a handy case of why this may be so. Having been wracked by conflict in the endless civil war since 2013, the country remains fragile and severely weak economically.
What purpose would suspension serve for a country whose situation is dire and whose salvation is also rooted in its refuge in the EAC, which is sworn to ensure peace so that the country may keep on its feet?
There are major implications. A continuously unstable South Sudan or any other member of the Community destabilises the entire region.
That summarises the complexity of the EAC project; that, even close to twenty years since its reincarnation, it essentially is still working to forge a single voice from the diversity of political interests and economic realities of its members.
In all of these, it does not appear likely that an errant member will be bundled out just yet.
What seems more urgent for now is to keep at building the Community, an endeavour that nevertheless requires money.
The EACSOF petition acknowledges this, emphasising how “delayed remittances and failure to achieve 100 per cent compliance is detrimental to the survival of EAC.”
Therefore, in as much as the regional community serves each member’s interests, and in spite of any member’s fragile situation, it is imperative that something must be done to ensure the countries meet their obligations.
The partner states, after all, acceded to the EAC treaty. They must be accountable for the health of the Community.
December 31st is the annual deadline for payment to the Community. We will know by then how members will have fared for the current year 2019/2020.
To ensure compliance long term, Article 143 must be given more teeth. Questions, therefore, must be asked of the Council of Ministers about what plans are in place against the defaulters and the member states with recurrent carried over arrears.
The views expressed in this article are of the author.
The delay or failure to honour their commitments has now been called out by the East African Civil Society Organizations’ Forum (EACSOF). EACSOF has observer status at EAC.
Its petition last weekend to the speaker of the regional legislative assembly (EALA) is calling for strong measures to ensure financial compliance. It suggests the EAC treaty should provide sanction as drastic as suspension of defaulters among other possible measures.
It is easy to see why. Article 143 of the EAC Treaty which is about enforcement of rules is bland and, as someone noted, “appears to only threaten sanction on errant members.”
Its reads in full: A Partner State which defaults in meeting its financial and other obligations under [the] Treaty shall be subject to such action as the Summit may on the recommendation of the Council, determine.
There have been serial defaults and payment delays by member states. Evidently, the article’s spirit and intent to punish does not seem to have been summoned.
The result of this is quantifiable. Were the six EAC partner states regularly remitting the obligatory annual contribution of $8.4 million each, the secretariat would have been collecting a total amount of $50.3 million per year.
The rate of compliance falls far short. During the 2018/19 financial year, for instance, the members remitted $29.7 million as of June 2019, amounting to 59 per cent of the expected total.
None of the EAC countries has fully paid on their 2018/19 obligations. Kenya at over 95 per cent paid still has some balance, followed by Tanzania (89 per cent paid), Rwanda (87 per cent) and Uganda (76 per cent).
Burundi has paid 5 per cent ($408,584) of the obligatory $8.4 million for each member state.
South Sudan had paid nothing as of June 2019 to fulfil its financial obligations. The country owes $19.3, being this year’s payment and accumulated arrears.
South Sudan would be the first casualty should the suspension rule be adopted. Burundi would be in a precarious position.
For now, as to why provision under Article 143 may not have been applied, we can only speculate. One could argue that one of the reasons may have something to do with the socio-economic and political situation in the region.
Aside from expulsion, suspension from the Community is the fullest sanction possible, and perhaps the most effective.
But, as a likely solution, it is doubtful it would be politically or even morally possible at this time.
South Sudan presents a handy case of why this may be so. Having been wracked by conflict in the endless civil war since 2013, the country remains fragile and severely weak economically.
What purpose would suspension serve for a country whose situation is dire and whose salvation is also rooted in its refuge in the EAC, which is sworn to ensure peace so that the country may keep on its feet?
There are major implications. A continuously unstable South Sudan or any other member of the Community destabilises the entire region.
That summarises the complexity of the EAC project; that, even close to twenty years since its reincarnation, it essentially is still working to forge a single voice from the diversity of political interests and economic realities of its members.
In all of these, it does not appear likely that an errant member will be bundled out just yet.
What seems more urgent for now is to keep at building the Community, an endeavour that nevertheless requires money.
The EACSOF petition acknowledges this, emphasising how “delayed remittances and failure to achieve 100 per cent compliance is detrimental to the survival of EAC.”
Therefore, in as much as the regional community serves each member’s interests, and in spite of any member’s fragile situation, it is imperative that something must be done to ensure the countries meet their obligations.
The partner states, after all, acceded to the EAC treaty. They must be accountable for the health of the Community.
December 31st is the annual deadline for payment to the Community. We will know by then how members will have fared for the current year 2019/2020.
To ensure compliance long term, Article 143 must be given more teeth. Questions, therefore, must be asked of the Council of Ministers about what plans are in place against the defaulters and the member states with recurrent carried over arrears.
The views expressed in this article are of the author.
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