East African Legislative Assembly, Arusha, Tanzania: 25 May, 2017: The EAC today presented for consideration Budget estimates for the Financial Year 2017/2018, totaling $110,130,183 to the East African Legislative Assembly Sitting in Arusha. Uganda’s State Minister for EAC, Hon Julius Maganda, presented the Budget Speech to an attentive House on behalf of the 2nd Deputy Prime Minister and Minister for EAC, Uganda and Chair of the EAC Council of Ministers, Hon Dr. Ali Kirunda Kivenjija.
The 2017/2018 Budget themed: “Accelerating Implementation of the EAC Integration Agenda” is a step-up from $101,374,589 presented to the House in the previous Financial Year. The Budget speech prioritizes on the consolidation of the Single Customs Territory (SCT) to cover all imports and intra-EAC traded goods, infrastructure development in the region and further liberalization of free movement of skilled labour across the Partner States.
Other key areas Hon Maganda said, include enhancement of regional industrial development through investment in key priority sectors and improvement of agricultural productivity with an aim to enhancing food security. Also of essence is the promotion of regional peace, security and good governance, on the one side and institutional transformation to spearhead the Community’s agenda on the other.
The Budget is allocated to the Organs and Institutions of the EAC as follows; East African Community Secretariat ($60, 183, 201), East African Legislative Assembly ($17, 996, 959) and the East African Court of Justice ($4,140,166).
The Inter-University Council for East Africa shall receive ($6,766,928), Lake Victoria Basin Commission ($11,960,643) while $ 2,466,655 is earmarked for the Lake Victoria Fisheries Organization. On their part, the East African Science and Technology Commission shall receive ($ 1,500, 164), East African Kiswahili Commission ($ 1,553,098) and the East African Health Research Commission ($ 2,225,324). The East African Competition Authority is to benefit from $1,337,045 in the Financial Year 2017/18.
The 2017/2018 Budget is to be financed by Partner State contributions through the Ministries of EAC Affairs ($50,226,522); Ministries responsible for Education – ($ 4,848,431) and Ministries responsible for Fisheries ($ 1, 549,254). Development Partners will support the Community to the tune of ($52, 868,638) while Member Universities will inject in to the kitty $ 303, 435. The miscellaneous revenue is pegged at $ 333,903.
The Minister cited a number of assumptions on which this year’s budget is pegged on to include the continued and consolidated political support of the EAC integration and the availability of adequate financial resources and remittances. Political stability and good governance as well as safe and stable security across the region are other areas of consideration.
The Minister informed the House of challenges the Community will have to address. “Mr. Speaker, the key anticipated challenges during the implementation of Community programmes and projects may include: persistent delays in remittance of funds from Partner States and Development Partners and limited financial resources (overall budget declining yet the demand is increasing on the Community to deliver more services to East Africans), occasioned by reduced support from Development Partners”, the Minister said.
“Delayed harmonization of national laws that impact on the implementation of the EAC Common Market Protocol and understaffing, which is seriously impacting on effectiveness and efficiency in implementation of projects and programmes are other challenges, we need to address”, the Minister added.
The Minister however reiterated mitigation strategies to address the challenges. “Mr. Speaker, the Community will closely follow-up on the remittances by Partner States to facilitate timely implementation of programmes and implement the institutional review as per the directive of the 17th Summit of the Heads of State,” he said.
The EAC Political Federation is yet another key priority area on the agenda in the coming Financial Year. In a bid to promote good governance, the EAC will dispatch Election Observer Missions to observe general elections in the Republic of Kenya and Republic of Rwanda in August 2017. The Minister also affirmed that the Community will continue to hold the annual EAC University Debates. The debates which lead to the appointment of the Youth Ambassadors have been critical in promoting the agenda of integration among the University student community.
On Peace and security, the Minister succinctly called for measures to ensure effective policing to counter terrorism and crime.
“The success of the EAC integration process must be supported by a predictable security environment. During the reporting period, the Peace and Security sector continued regular consultations towards joint action against Terrorism and other transnational and cross border organized crimes. The next Financial Year will see Standing Operating Procedures in Policing function developed as well as operationalization of the Police Regional Centres of Excellence in the Partner States”, he said.
On the global economic performance outlook, the Minister informed the House the global economy had expanded by 2.9 % in 2016 compared to a revised growth of 3.1% in 2015. The slowed growth was occasioned by constrained global trade, subdued investment and heightened policy uncertainty associated with the United Kingdom’s decision to leave the European Union (EU) and elections in the United States of America (USA).
“The real GDP in the EAC is estimated to have grown by 6.1% compared to 5.8 % growth recorded in 2015. The growth was largely supported by investment in public infrastructure, buoyant private consumption and low oil prices. Tanzania recorded the highest real GDP growth in the region, expanding by 7.2% in 2016, compared to a growth of 7.0 % in 2015. Kenya and Uganda recorded improved economic performance of 5.8 % and 4.8 % respectively in 2016, compared to 5.7 and 4.8 % in 2015. Rwanda recorded a decelerated growth of 6.0 % compared to 6.9 % in 2015. Real GDP in Burundi contracted by 0.5 % in 2016 compared to a contraction of 4.0% in 2015,” he said.
The Minister highlighted a number of achievements registered in the Financial Year 2016/2017, notably, the upscaling of the Single Customs Territory (SCT) through finalisation of operational instruments of the business manuals, deployment of SCT Monitoring and Evaluation tools and deployment of staff in some Partner States.
Hon Maganda maintained the consolidation of the Customs Union remained a key priority during the period under review. The operationalization of the Single Customs Territory, the establishment of One Stop Border Posts and the development of the regional Customs instruments underpinned the drive to promote conducive trade and investment in the region.
Following the successes registered during the initial stages of the Single Customs Territory, the roll out of goods cleared under the Single Customs Territory was expanded both on the Northern and Central Corridors.
On legislation, the Minister informed the House the One Stop Border Posts (OSBPs) Act was fully assented to and gazetted for its commencement. The OSBP Regulations were finalized by the Sectoral Council on Legal and Judicial Affairs and adopted during the 35th Meeting of the Council of Ministers.
The Chair of the Council of Ministers further stated that the EAC Elimination of Non-Tariff Barriers Bill (NTB), 2015, passed by EALA was undergoing assent and would spur business and enhance the free movement aspects. The United Republic of Tanzania, the Republic of Kenya and the Republic of Uganda have assented to the Act. The Act, according to Hon Maganda, has been sent to remaining Partner States for assent.
The EAC Non-tariff Barriers (NTBs) Act is expected to address outstanding NTBs in the EAC Time Bound Programme (TBP) in pursuit of promotion of Intra-EAC Trade and to curtail the proliferation of NTBs in the region. According to Hon Maganda, the status of NTBs in EAC region as at the end of December 2016, indicated that sixteen (16) NTBs are unresolved, four (4) new NTBs had been reported, and one hundred and thirteen (113) NTBs had been cumulatively resolved since 2009.
The Minister informed the House the Secretariat was undertaking the acquisition of Infrastructure to support the payment and settlement systems in the region. He said a number of payment systems had been procured with the support of the African Development Bank (AfDB). The Minister said automated clearing house systems (ACHs) to accommodate cheque truncation system for National Bank of Rwanda was in place with disaster recovery sites and business continuity infrastructure for Central Bank of Kenya, National Bank of Rwanda and Bank of Tanzania now secured.
“At the same time, an upgrade of the large value payment system-UNISS is ongoing in Uganda and the bidding documents for the upgrade of Central Bank of Kenya and Bank of Tanzania large value systems have been submitted to AfDB for consideration and approval”, he added.
Hon Maganda said bids to procure and implement disaster recovery and business continuity infrastructure equipment for Bank of the Republic of Burundi were successfully evaluated and the contract to for SWIFT connectivity to enable the Burundi integrate to the East African Payment System (EAPS) signed in March 2016
On Infrastructure, the Minister informed the House of the completion in May 2017 of the 90 Km long Taveta – Mwatate road, itself, a part of the multinational Arusha – Holili/Taveta – Voi road.
In addition, the Minister said feasibility studies and detailed designs of two key links for the Republics of Rwanda and Burundi to the Central Corridor commenced in April, 2016.
“One project is the 250-km long Nyakanazi – Kasulu – Manyovu road in Tanzania linking to the 78-km long Rumonge –Bujumbura road in Burundi. The other is the 92-km long Lusahunga – Rusumo road in Tanzania linking to the 70-km long Kayonza – Kigali road in Rwanda” Hon Maganda said.
On railways, the Minister informed the House of the near completion of the Mombasa-Nairobi Standard Gauge Railway line in Kenya, adding that its inauguration was scheduled for June, 2017. Similarly, construction of the new Standard Gauge Railway of the Kampala-Malaba section in Uganda, is expected to commence during FY 2017/18. For the Central Corridor, the construction of the Dar-es-Salam-Morogoro section commenced in April, 2017.
On agriculture and food security, the EAC is strongly committed to support implementation of the June 2014, African Heads of State Malabo Declaration on Agriculture Growth and Transformation in Africa.
The Minister remarked the 34th Council of Ministers had adopted the EAC Food and Nutrition Security Policy and the EAC Livestock policy. “The process of developing an implementation strategy for the food and nutrition security policy has commenced, whereas the development of the implementation strategy for the livestock policy will commence in the early days of the new financial year”, he added.
On energy, the Minister remarked that all efforts were underway to increase production and to reduce costs, saying it was expensive in the region.
“Energy in EAC region remains expensive with a regional average cost of 15US Cents at the grid three times higher than 5 US cents in Ethiopia. He remarked that shared hydropower plants and interconnectors were some of the initiatives been used to reduce costs”, he said.
The Minister informed the House of implementation of projects under the Power Master Plan, which had raised the region’s installed capacity from 4,635MW in 2015 to 4,893.3MW in 2016, against a peak demand of 3,587.3MW in 2016 for the interconnected system.
The Minister also presented the priorities for the Tourism and Wildlife sector to include exploring innovative ways to brand EAC as a Single Tourist Destination and development of more diverse promotional materials. He further remarked that the region would be undertaking awareness programmes and other initiatives geared towards full implementation of the Single Tourist Visa by all Partner States.
In the area of EAC Health Systems and Health Policies Harmonization and Integration, the Council had in the financial year 2016/17, approved and officially launched several documents including the EAC Regional Health Policy (2016) and the EAC Health Sector Strategic Plan (2015-2020).
In order to strengthen the Monetary Union, the Minister said the Council will initiate Bills to establish, key EAC Institutions. He outlined them as the East African Monetary Institute Bill, 2017 and The EAC Statistics Bureau Bill, 2017 to establish the EAC Statistics Bureau.
The House is next week expected to debate on the presented Budget.
-Ends-
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Mr. Bobi Odiko,
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East African Legislative Assembly;
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Email: bodiko@eachq.org
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Arusha, Tanzania
