The East African Community (EAC) plans to table a $ 138.3 million budget for the 2012/2013 fiscal year, a slight increase compared to $ 136.9million tabled during the year 2011/12.
EAC member countries, especially Tanzania, Kenya, Uganda and Burundi, are battling skyrocketing inflation, which currently stands at double digits. In Tanzania inflation has reached 24 per cent, which is the worst level since 1998 when the third phase regime took major macro-economic reforms.
Budget priorities are intended to consolidate the customs union and implementation of the common market protocol, chairperson of the EAC Council of Ministers, who is also Kenya’s minister for the East African Community, Musa Sirma, said when presenting the estimates here on Thursday evening.
The budget estimates will also cover completion of negotiations on the East African Monetary Union Protocol; cooperation on cross-border infrastructure; implementation of critical activities of the EAC Food Security and Climate Change Master Plan.
Others are implementation of activities of the Lake Victoria Basin Commission, including water and sanitation for 15 towns in and around the lake and its catchment area.
Sirma highlighted a number of achievements registered in fiscal year 2011/2012, notably the expansion of the region’s gross domestic product by 5.9 per cent and sustained growth of intra-EAC trade, which now stands at $4 billion having risen from $2 billion in 2005.
“Intra-EAC trade has grown from 7.5 per cent in 2005 to 11.5 per cent in 2011. This means that the intensity of trade among partner states is growing at a modest pace. Also there are partner states that were intra-EAC importers that have become intra-EAC exporters,” Sirma stated.
“For example, Tanzania registered surplus budget in its intra-EAC trade in 2010 principally due to coherent regional policy measures that have enabled EAC to fully implement a free trade regime, coupled with continuous improvement in trade facilitation,” he added.
The chairperson noted that among identified priority areas, interventions in the customs union will focus on carrying out activities that will enable the region to turn into a single customs territory.
Sirma observed that a single customs territory “will crystallise the gains of integration characterised by minimal internal border controls and a more efficient institutional mechanism in clearing goods”.
He said a high level task force comprising experts from partner states will, in July, embark on an exercise to transform the EAC into a single customs territory, adding that a progress report would be made to the Summit in November.
On implementation of the Common Market Protocol, he said emphasis would be on the operationalisation of free movement of labour provisions, as well as the integration of regional financial markets to allow free movement of capital.
Cooperation in cross-border infrastructure development would see commencement of construction of the Arusha-Holili/Taveta-Voi road; conclusion of detailed designs for the Malindi-Lunga Lunga-Holili-Bagamoyo road and development of one-stop border posts at Namanga, Rusumo, Holili-Taveta, Lunga Lunga-Horohoro, Kabanga-Kombero and Kagitumba.
Other activities planned include completion of detailed studies for the Dar-Isaka-Kigali/Keza-Msongati railway; rail links between Kenya-Uganda and Uganda-Tanzania; strategies for harmonising EAC energy generation; construction of three interconnections already identified as well as resources mobilisation for Bujumbura port and rehabilitation projects for Mombasa and Dar es Salaam ports.
Regarding ongoing efforts to establish a single financial market, the Council chairperson noted that substantial progress had been made, but added that the partner states needed “to remodel their economic policies in a regional perspective with a view to creating robust frameworks for economic convergence, production of reliable comparable statistics, creation of a vibrant compliance and enforcement mechanism, and independent institutions to support a robust East African Monetary Union.”
The fiscal year 2012/2013 budget will be financed by partner states contributions through the ministries of EAC ($ 35,375,722), partner states through other agencies ($ 4,825,709), development partners ($ 97,079,329) and other income ($ 1,035,695).