A look at the East African Community budget for next financial year, what are the priorities

During the month of June, partner states of the East African Community present their national budgets for the next financial year by setting priorities and making resource envelopes ready to ensure that their populations receive the required services. In these budgets, the partner states provide for contributory funding to run the operations of the regional bloc, the East African Community (EAC).

In Uganda, Finance Minister Matia Kasaija on June 15 presented to the country the Shs52.7 trillion budget that will see the government implement several programmes including the financing of the Parish Development Model (PDM) which has been called the last mile wealth creation programme. In the PDM, the 39 percent of the population that remain locked in subsistence economy is being aided with Shs100m per Parish every year to help those families work into the money economy through commercial agriculture.

Last week, the East African Legislative Assembly (EALA) sitting in Arusha, Tanzania passed the EAC budget worth $103.8m (about Shs379.5b) for the 2023/2024 Financial Year. The passing of this budget followed its tabling on June 13, 2023 by the Chairperson of the Council of Ministers and Burundi’s Minister for EAC Affairs, Youth, Sports and Culture, Dr. Ezéchiel Nibigira.

While tabling the EAC budget, Dr Nibigira said that the budget estimates for the Financial Year 2023/2024 were being presented at a time when the regional economies were experiencing global shocks arising from the continuing Russia-Ukraine war, tight global financial conditions, lingering effects of Covid-19 and the impact of climate change.

“Despite these challenges, economic growth in the region improved to 4.8 percent in 2022 from 3.5 percent in 2021. The strong growth in the region was supported by the good performance of the industry, services, construction, mining and manufacturing sectors,” said Dr. Nibigira.

 “Global economic growth is expected to remain weak, mainly due to anti-inflationary measures and geopolitical risks,” added Minister Nabigira who immediately showed hope by revealing that there is a projected positive outlook in the EAC economies.

According to Dr Nabigira, this positive outlook is being driven by the strong performance of the services sector, prudent government policies and increasing public and private investment in the region.

What is in the budget

In implementing this budget, the EAC Secretariat will focus on nine priority areas. These included the following; strengthening of regional governance processes, and domestication of regional and international commitments for sustainable peace and stability; increasing sensitisation, visibility, knowledge, awareness and participation of the private sector, citizens and other stakeholders in the EAC integration process, and harmonisation of trade related policies, laws and regulations, and streamlining of customs and trade facilitation systems for increased trade and investment.

Others are: harmonisation of fiscal and monetary policies, and establishment of requisite institutions towards the realisation of the East African Monetary Union, and; leveraging modern technologies to enhance productivity, value addition, and to promote regional supply and value chains and digital platforms.

 Also under focus will be the enhancement of the regional productive capacity and increase in value addition to improve the economic welfare of East Africans; strengthening of the social sectors to improve the social welfare of East Africans; improvement and expansion of quality multi-modal and multi-sectoral infrastructure to support free cross-border movement, and; strengthening of the capacity of all EAC Organs and Institutions to effectively discharge their mandate.

Charged with the running of the day-to-day activities of the EAC, the Secretariat will take the lion’s share after being allocated $50.9m, followed by the recently expanded EALA that will spend $17.6m. other top spenders will be the Inter-University Council for East Africa which has been allocated $12.3m; the Lake Victoria Basin Commission with $8.4m and the East African Court of Justice, $4.4m. 

Lake Victoria Fisheries Organisation will spend $2.8m; East African Science and Technology Commission will spend $2m; East African Health Research Commission has $2.1m to spend; East African Kiswahili Commission will get $1.5m while the East African Competition Authority was allocated $1.3m.

Minister’s speech

The Minister told the Assembly that the Secretariat is working on the enhancement and interconnectivity of Customs Systems so that there is realization of the EAC Single Customs Territory. He said that the EAC is at the forefront to facilitate seamless exchange of trade information and faster clearance of goods across borders.

“All processes relating to the accreditation of Regional Authorized Economic Operator Programme, and the issuance of the EAC electronic certificate of origin have been automated.” He said.

 Dr Nabigira added that in the next financial period the Customs will, among other things, focus on: the consolidation and updating of the regulatory framework for the Single Customs Territory to ensure sustainability of the gains made so far; integrating the Electronic Cargo Tracking Systems along the Transit Corridors, and; enhancement of interconnectivity of systems in key sectors to facilitate information exchange.

On trade, the Minister disclosed that the EAC has continued to put in place mechanisms to enhance intra-EAC trade and, at the same time, actively participating in the negotiations at the Tripartite (COMESA, EAC and SADC) and at the African Continental Free Trade Area (AfCFTA).

Among the achievements in the 2022/2023 FY were the resolution of 23 out of 32 Non-Tariff Barriers (NTBs) that were reported with the remaining nine (9) NTBs at different stages of resolution. The Community also finalised and submitted to the African Continental Free Trade Area (AfCFTA) Secretariat the EAC offers for tariff and services liberalisation.

 “This facilitates trade between the EAC Partner States with other African countries under the AfCFTA framework. Additionally, three of the EAC Partner States are participating in the AfCFTA Guided Trade Regime which involves match-making of firms ready to trade within the AfCFTA framework,” he said.

 On the implementation of the Common Market Protocol, Hon. Nibigira said that in the FY 2023/2024, the Secretariat will continue tracking Partner States’ progress in amending identified noncompliant laws, regulations and administrative guidelines impacting on the key freedoms and rights under the EAC Common Market Protocol.

On the Monetary Union, the Minister informed the Assembly that during the FY 2022/2023, the EAC Statistics Development and Harmonisation Regional Project was restructured into the EAC Project of the Eastern Africa Regional Statistics Program for Results (EARSPforR).

“The project is supporting the production of harmonised and quality statistics through capacity building of the National Statistical Offices (NSOs) and the EAC Secretariat and the delivery of the statistical requirements for monitoring the progress towards attaining the macroeconomic convergence criteria as set out in the East African Monetary Union (EAMU) Protocol.”

On the establishment of institutions to support the EAMU, the Dr. Nibigira said that the Council of Ministers had approved the organisational structure for the East African Monetary Institute (EAMI) and initiated the administrative process for identifying the host Partner State for the EAMI, adding that the EAMI is expected to carry out the preparatory work for the creation of the EAMU.

On the establishment of payment and settlement systems in the region, the Minister said that the EAC Secretariat continues to support the Partner States’ Central Banks in implementing a secure, efficient, and reliable payment and settlement system to ensure efficient flow of transactions within the region through the EAC Payment and Settlement System Integration Project (EAC-PSSIP).

On the East African Legislative Assembly (EALA), the Minister said that the Assembly had recorded many achievements including the: passage of the EAC Customs Management (Amendment) Bill, 2022 to enhance seamless operations of the EAC Single Customs Territory; the EAC Financial Service Commission Bill, 2022 and the EAC Surveillance, Compliance and Enforcement Commission Bill, 2022 which further lays the foundation for the establishment of the EAC Monetary Union; and the EAC Supplementary Appropriation No.3 Bill, 2022 which provided the legal framework for the Supplementary Budget.

 “In the FY’ 2023/2024, the Assembly will prioritise enactment of the remaining Bills that are a prerequisite for the establishment of the Monetary Union, and enactment of the following pending bills from the 4th Assembly: The Persons with Disabilities (PWDs) Bill; The EAC Youth Bill; The EAC Cross Border Trade in Professional Services Bill; The EAC Pharmaceuticals Bill, The EAC Emblems (Amendment) Bill; The EAC Sexual and Reproductive Health Bill; The EAC Cultural Heritage Bill; and The EAC Standardization, Accreditation and Conformity Assessment Bill” said the Minister.

On the East African Court of Justice, the Minister disclosed that the Court had seen an increased number of matters filed before it, as a result of its enhanced visibility and the rising confidence among East Africans in its operations.

“During the FY 2022/2023, 105 matters were filed before the Court compared to the 77 matters filed in the FY 2021/2022.”

 Dr. Nibigira said that though the Court has seen an increase in the number of matters filed, it has also seen a considerable increase in its case backlog. The case backlog increased from 183 matters in FY 2021/2022 to 265 matters in FY 2022/2023.

The Minister said that the Court’s priority interventions in the FY 2023/2024 will be to increase the number of days for its sittings, conclude more cases in a timely manner, enhance the skills of Judges and staff for efficient delivery of justice, conduct sensitisation and awareness programmes in the Partner States, and enhance collaboration with other regional and international Courts.

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