EAC tables USD 91.7 million Budget estimates before EALA for the 2021/2022 financial year

East African Community Headquarters, Arusha, Tanzania, 28^th June, 2021: The East African Community has tabled before the East African Legislative Assembly the budget estimates for the 2021/2022 Financial Year totalling US$91,784,296. 

The Chairperson of the Council of Ministers and Kenya’s Minister for EAC, Hon. Adan Mohamed, in the Budget Speech read on his behalf by Chief Administrative Secretary, Hon. Ken Obura, said that the 2021/2022 budget was coming at a time the COVID-19 pandemic had ravaged economies through lockdowns and economic shutdowns that had affected economic performance in the entire region negatively. 

The 2021/2022 Budget is themed Economic Recovery through Industrialization and Inclusive Growth. 

On priorities for the 2021/2022 FY, Hon. Mohamed said that the EAC would focus on 10 priority areas, namely: Private Sector Development; Peace and Security; Health/COVID-19 Response; Trade Development; Infrastructure Development; EAC Digitalization Agenda; Agriculture, Nutrition, Biodiversity, Environment and Circular Economy; Expansion of membership to EAC and strengthening relationships with the African Union and other regional organisations (RECS); Institutional transformation including Skills Development, and; Promotion of awareness creation and dissemination of information on the Community.  

The 2021/2022 Budget is allocated to the EAC Organs and Institutions as follows:  EAC Secretariat – US$43,858,070; East African Legislative Assembly – US$15,465,345; East African Court of Justice – US$3,791,723; Lake Victoria Basin Commission - US$8,167,585; East African Science & Technology Commission – US$1,555,088; East Africa Kiswahili Commission – US$1,284,219; East Africa Health Research Commission – US$1,860,181; East African Competition Authority – US$1,011,136; Inter University Council for East Africa – USD 11,161,510, and; Lake Victoria Fisheries Organization – US$3,629,439. 

This year’s budget is a step down from the amount of US$97,667,707 approved by the August House for the 2020/2021 Financial Year.  

The Minister further gave a scorecard on the performance of the regional economy light of the COVID-19 pandemic, which he noted might not go away soon. 

“The reality is that COVID-19 will be with us for a much longer time than earlier anticipated. The impact of the pandemic on EAC Partner States’ economies has been devastating, to say the least. Manufacturing and agriculture sectors have been affected due to disruption in global supply chains and a fall in global demand for key export goods such as horticulture produce,” said Hon. Mohamed adding that during the year 2020, exports of goods shrank in all EAC Partner States.   

“For example, exports from Kenya and Uganda, contracted by 7.6 percent and 1.7 percent respectively, between March to June 2020 while during the same period, imports of intermediate goods contracted by 25 percent, 11.3 percent and 22.9 percent in Kenya, Uganda and Tanzania respectively,” he said. 

“Similarly, the industrial sector in Rwanda, Kenya and Uganda shrunk by 3.5 percent, 0.5 percent and 6.3 percent respectively. In addition, Covid-19 has led to deteriorating external positions in all EAC Partner States on account of its adverse consequences on tourism and aviation sectors, workers’ remittances, foreign direct investment and loan disbursements,” added the Chair. 

The Chairperson informed the Honourable Members that economic growth in the EAC region averaged 2.3 percent in 2020 compared to an average of 5.4 in 2019.  

“The weak regional economic growth in 2020 was mainly due to disruption of businesses and economic activities in the region following the outbreak of the COVID-19 pandemic for which the first case was reported in the EAC region in mid-March 2020.  Containment measures put in place to limit its spread, including travel restrictions and lockdowns, led to a contraction of GDP in all the EAC Partner States,” said Hon. Mohamed. 

“The most affected sectors were services and affiliated sectors, and those that are dependent on global supply chains. Growth in the EAC region is expected to recover in 2021, reflecting a resumption of global economic activity with the easing of containment measures and sustained implementation of growth-supporting measures.” 

On the EAC Single Customs Territory, the Cabinet Secretary said that during the next financial year, Customs would focus on some key areas, among them: Finalization of the review and development of Customs Union Instruments including the comprehensive review of the EAC Common External Tariff (CET), EAC Customs Management Act 2004, and the EAC Regional Customs bond and the regulatory framework for the Assembly Sector.  

Customs would also focus on the: Consolidation of the gains of the Single Customs Territory for the full attainment of a fully-fledged Customs Union; Enhancement of Interconnectivity of systems in key sectors to facilitate information exchange; Development of suitable infrastructure to facilitate cross border women traders, and; Strengthening of mechanisms to resolve Customs related Non-Tariff Barriers (NTBs) that hamper intra EAC trade. 

On the Monetary Union, the CS informed the House that in February 2021, the 40th meeting of the Council of Ministers decided that the Act for the Establishment of the East African Monetary Institute (EAMI) comes into force on 1st July, 2021.   

“The notice for the commencement of EAMI Act was subsequently gazetted in March 2021.  Official communication notifying Partner States to express interest to host the EAMI was forwarded to the Partner States in May 2021,” said the Council Chair, adding that once established, the EAMI would be expected to carry out much of the preparatory work for the creation of the East African Monetary Union. 

On infrastructure development, in the FY 2021/2022, the Chair said that the Secretariat would continue implementing successor multinational road projects linking Partner States and the Phase II OSBP programme including the design, construction and operationalization of 12 new prioritized OSBPs within the EAC region.  

“The Secretariat has further secured funding amounting to USD 1,748,565 from the AfDB for undertaking design of the multinational Burundi/Tanzania Road: Mpanda (Vikonge)-Uvinza and Uvinza-Kanyani/Gisuru-Rusengo and Makebuko-Bugarama sections,” he said. 

On civil aviation, the Hon. Mohamed said that EAC Partner States had committed to fully implement the Yamoussoukro Decision as part of the Common Market Protocol and in line with the ongoing efforts by the African Union Commission (AUC) and the African Civil Aviation Commission (AFCAC) to establish and operationalize the Single African Air Transport Market (SAATM). 

“Mr. Speaker, in the FY 2021/22, the Civil Aviation and Airports Sub-Sector priorities will focus on implementation of the EAC Upper Airspace Seamless Operations project (2017/18 to 2021/22), and on implementing strategies to reduce the current high cost of intra-EAC Air tickets and air operations including the harmonization of charges and taxes,” said the Chairperson. 

On legislation, the Chairperson informed the Assembly of the passing the East African Community Supplementary Appropriation (No. 2) Bill, 2020; the East African Community Appropriation Bill, 2020; The Lake Victoria Basin Commission Bill, 2020; and the East African Competition (Amendment) Bill, 2021.  

“The Assembly also adopted a number of resolutions in order to further its legislative work, the notable one being, the resolution to establish an emergency fund to facilitate the response of the Community to Pandemics and Disease outbreaks to the Council,” said the CS. 

“The Assembly’s representative role was undertaken through the respective EALA Chapters in the Partner States. The Chapters undertook sensitization of the people of EAC on the regional integration process, on the theme, “EAC beyond 22 years: EAC Integration Agenda: Accessing the gains of Integration," said Hon. Mohamed. 

The Chairperson added that in the next Financial Year, the Assembly would prioritize the enactment of the Bills which are under consideration by its Standing Committees (the EAC Integrity and Anti-Corruption Bill, 2020, the East African Community Pharmaceuticals Bill, 2020; the EAC Sexual Reproductive Health Rights Bill, 2021 and the EAC Livestock Bill, 2021), oversight of the implementation of EAC COVID-19 Recovery Plan and continued sensitization of the people to support the integration process. 

On the East African Court of Justice, the Chairperson informed the Assembly that the number of new cases filed before the Court increased rapidly during the last Financial Year despite the Covid-19 pandemic from 60 in the FY 2019/2020 to 78 in the current financial year.  

“During the current 2020/2021 FY in which business was largely disrupted by COVID-19, the Court concluded 18 more cases than in the previous financial year due to the deployment of technology whereby all cases were being conducted online with litigants, Judges and staff scattered all over the region,” said the Chairperson. 

The Chairperson disclosed that the Court's priority interventions in the FY 2021/2022 would be to: increase the number of cases concluded at the earliest possible time; enhance the skills of judges and staff for delivery of justice; conduct sensitization and awareness programmes in the Partner States; and enhance collaborations with other regional and international Courts.