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Cash-strapped EAC Resorts to Cost-cutting Measures

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Failure by the Partner States to remit their contributions in time has left the East Africa Community (EAC) struggling to meet its financial needs. The Secretariat has now resorted to cost-cutting measures as is wades into a murky future.

“Since taking over the office in May this year, I have instituted several reforms in the EAC Organs and Institutions aimed at cost reduction in the EAC projects and programmes. The reforms target savings to the tune of US$6 million in the Financial Year 2016-2017 alone,” says Dr Libérat Mfumukeko, the 5th Secretary General and successor of Dr Richard Sezibera.

European Union (EU) remains EAC’s leading multilateral donor and still considers the Secretariat an entity worthy of support on the basis of better accountability according to Dr Mfumukeko.

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“The implementation of these reforms is going on well and already some positive results are being received. For example, for the first three months of implementation (May to August 2016), the first estimates point to savings of US$588,768 in travel expenditures alone,” says the Secretary General.

“The reforms focus on cutting any wastage, containing and reducing travel where all EAC Staff must spend 50 per cent of their time in Arusha and also hold 25 per cent of the meetings via video conference facility. We have also reduced the number of days for our meetings to a maximum of four. It is no longer business as usual.”

The European Union, through a consultancy firm, Moore Stephens LLP based in London, undertook a Fiduciary Risk Assessment (FRA) on the EAC Secretariat’s operations in five pillars, namely, Internal Control System; Accounting Systems; Independent External Audit; Procurement; and Sub-Delegation. The firm checked on our procedures and processes on the mentioned pillars.

According to the findings, the EAC Secretariat has met the internationally acceptable standards and successfully undergone the assessment as required by the European Union. The conclusion was that EAC applies appropriate rules and procedures in all material aspects for providing financing from European Union funds through procurement and in accordance with the criteria set by the European Commission (the EU executive).

Dr Mfumukeko says efforts are being made to raise money to bolster Secretariat operations in light of the strained financial situations of the member governments.

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“One of these high level missions includes negotiation with the EU in Brussels and where the future cooperation between EAC and EU was discussed and a grant totaling 85 million euro was committed to our work.   These funds will support the following key priorities i.e. Peace and Security, Regional Integration, Natural Resources, Institutional Strengthening and Partner States will access 40 million euro for trade facilitation,” says the Secretary General.

He has also held strategic discussions with all Development Partners contributing to the EAC Partnership Fund, USAID, Trade Mark East Africa (TMEA), KfW, Aga Khan Foundation and United Nations, with the aim of cementing the relationship between EAC and the Development/bilateral Partners.

Further bilateral discussions have been held with Ambassadors from Germany, USA, Belgium, France, Brazil and Ireland.

During all these high level discussions, the Development Partners reaffirmed their strong commitment to supporting EAC, financial and technically to achieve its overarching mandate and ambition.

“I wish to remind you that EAC is the only block in the continent that has a dream of walking the whole journey of integration. Our ultimate dream is to be in a political federation which is the most unique feature of our integration process,” says Dr Mfumukeko.

EAC has more than 45 different projects and sub sectors that we are involved in (from road construction, energy, culture, citizen sensitization, immigration, and others.

To eliminate duplication, poor reporting and enhance coordination with development partners who contribute more than 50 per cent of the EAC budget we established the Project coordination unit to enhance how funds are managed and other funding from Development Partners.

A multi – disciplinary team has been appointed initially to serve on an interim basis as the EAC Projects Coordination Unit. This Unit is now functional and monitoring all EAC donor funded projects and has already created a database for all these projects and can produce a single report for all projects.  The Unit serves as a one-stop desk for information on EAC projects both internally and externally and we are working on full time staffing modalities to be considered in the near future.

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