EAC’s $125 MILLIONS BUDGET PRIORITIZES CONSOLIDATION OF THE COMMON MARKET AND THE MOVE TOWARDS THE MONETARY UNION

The Deputy Minister for EAC, United Republic of Tanzania Dr. Abdallah Sadala Abdallah delivers the Budget Speech.

The Minister for EAC Affairs, Hon Shem Bageine holds the Budget Speech aloft at the start of the proceedings earlier today.  He is flanked by the Minister for EAC Burundi, Hon Leontine Nzeyimana, Hon Dr. Abdallah Sadala Abdallah, Deputy Minister for EAC, United Republic of Tanzania and the Counsel to the Community, Hon Wilbert Kaahwa.  On extreme right is the Clerk to the Assembly, Mr. Kenneth Madete.

 

  East African Legislative Assembly, Arusha, June 4, 2014: The EAC Council of Ministers today presented Budget estimates for the Financial Year 2014/2015 totalling $124,069,695 to the East African Legislative Assembly sitting in Arusha.   Hon Dr. Abdallah Sadala Abdallah, Deputy Minister for EAC, United Republic of Tanzania, presented the Budget Speech on behalf of the Chair of the EAC Council of Ministers, Hon Phyllis J. Kandie to an attentive House.

The 2014/2015 Budget down from $130 Million in the previous Financial Year, prioritizes operationalisation of the single Customs Territory including the setting up of an institutional framework to manage it, the full implementation of the EAC Common Market Protocol with particular focus on free movement of goods, services, labour and capital as well as the implementation of the EAC Industrialisation policy.

Other key areas include development of cross-border infrastructure with particular focus on implementing decisions of the Summit Retreat, implementation of the roadmap towards the EAC Monetary Union, implementation of the Tripartite Free Trade Area (COMESA-EAC-SADC) and the sensitisation of East Africans towards deepened East Africa integration.  

Other areas are the implementation of the EAC Strategy on Regional Peace and Security and the implementation of activities under the Political Federation division.

The Budget is allocated to the Organs and Institutions of the EAC as follows; East African Community Secretariat ($76,074,052), East African Legislative Assembly ($15,489,836) and the East African Court of Justice ($4,582,190).

The Inter-University Council for East Africa shall receive ($ 9,411,320), Lake Victoria Basin Commission ($ 13,372,466) while $ 2,813,771 is earmarked for the Lake Victoria Fisheries Organisation.   For the first time, three new Institutions are also set to benefit.   East African Science and Technology Commission shall receive ($ 679,821), East African Kiswahili Commission ($ 722,102) and the East African Health Research Commission ($ 924,067).


The FY 2014/2014 Budget is to be financed by Partner State contributions through the Ministries of EAC ($41,890,538); Partner States through other agencies ($5,067,735); Development Partners support ($73,180,446);  IUCEA-Member University ($ 375,190) Ministry of Education-IUCEA Headquarters $1,247,037), General Reserve ($ 2,102,828) and other income ($205,850).

 Hon Dr Abdallah highlighted a number of achievements registered in the FY 2013/2014, notably the commencement of the Single Customs Territory which has led to among others, the significant reduction of clearance time from Mombasa to Kampala and Kigali.

Hon Dr. Abdallah noted that the EAC Secretariat had developed a Special Economic Zone policy as envisaged under Articles 75 and 76 to boost trade and remarked that substantial progress had been made with regards to the finalisation of the EAC-Economic Partnership Agreements (EPA) Negotiations.

On the Common Market, the Chair remarked that the EAC Common Market Scorecard 2014 launched in February 2014 was a key tool in the implementation of the Protocol.

‘The Scorecard should be able to assist Partner States to identify areas of slow or limited progress and foster stronger peer learning to accelerate its implementation’ the Minister said.  He remarked that further amendments of the national laws to conform to the Common Market Protocol were envisaged for the next Financial Year. He noted that the Council of Ministers intends to introduce a Bill to the EALA to deal with challenges been witnessed with regards to implementation of the Protocol.

The Minister noted that the move towards deeper economic integration had gained impetus with the signing of the Monetary Union Protocol on November 30^th, 2013.  Minister Abdallah remarked that the EAC was gearing itself to the harmonisation of budget processes, harmonisation of tax policies, co-ordination of public debt management and the attainment of macro-economic convergence among others.  He informed the House that the region would embark on the procurement, installation and implementation of the Capital Markets infrastructure as one of the key priorities for the next Financial Year.

Under Infrastructure development, the Minister noted the on-going works especially on the Northern Corridor.  They include the Arusha-Holili/Taveta-Voi road project and the Malindi-Mombasa-Lunga Lunga and Tanga-Bagamoyo road which is on schedule to be completed by June 2014.

The African Development Bank, Hon Dr Abdallah, states, has also agreed to support the Lusahunga-Rusumo and Kayonza- Kigali road and the Nyakanazi-Kasulu-Manyovu and Rumonge-Bujumbura road.   In the railways subsector, the Secretariat received about USD 1.7 Million from the African Development Bank for the Railways Sector Enhancement project while a baseline study on the maritime subsector is almost complete. 

The Minister noted a number of initiatives in the civil aviation sub-sector aimed at sustainability of the lower EAC Airspace.  In the productive sectors, the Minister revealed the steady progress towards the establishment of the East Africa Centre for Renewable Energy and Energy Efficiency which he reported aims at providing a platform for sustainable energy in the region.

   The implementation of the 16 megawatt Kikagati-Murongo hydropower project is however yet to fully take-off despite the interest of the Private Sector.  In light of this aspect, Hon Dr Abdallah urged the United Republic of Tanzania and Republic of Uganda to expedite the bilateral agreement on the project to pave way for its implementation.

On industrialization and Small and Medium Enterprise Development (SMEs), the Minister was categorical that both areas are critical areas that spur development in the region. He further noted that the region had finalised the review of legal and regulatory frameworks for mineral value addition in the region.

  

The Mineral policy shall focus on priority minerals including iron ore, coal and nickel-cobalt-copper among others.  On environmental matters, the Minister noted that the region was committed to ratifying the Protocol on Environmental and Natural Resources.  So far according to Hon Dr. Abdallah, the Republic of Uganda and the Republic of Kenya have ratified the Protocol.

 Minister Dr.Abdallah thus reiterated the EAC’s desire to institutionalise joint participation in International Conventions and Treaties on Environment and Natural Resources.

‘To implement the outcome of the Rio Summit on sustainable development: The Future We Want, we developed an EAC Post-Rio+20 Plan of Action with support from United Nation Development Programme (UNDP). Furthermore, EAC was accredited as an Observer to the United Nations Convention on Biological Diversity and the United Nations Framework Convention on Climate Change’, the Minister said.

On tourism, the Minister was emphatic that the single tourism visa would play a key role in promoting the key sector.‘ Madam Speaker, the Community continues to promote EAC as a Single Tourist Destination abroad and regionally. This has been achieved by participating at the World Travel Market in London in November, 2013 and the International Tourism Fair in Berlin in March 2014’ he said.

He informed the August House that Partner States had agreed under the Principle of Variable Geometry to begin using the East African Tourist Visa.

‘The Republics of Kenya, Rwanda and Uganda launched the initiative in February this year.  The Republic of Burundi and the United Republic of Tanzania are expected to come on board as soon as they are ready’, he added.

The Minister termed some of the successes in the health sector in 2013/14 as the facilitation of the 5^th and 6^th EAC Regional Inter-Parliamentary Forum on Health Population and Development and support to the United Republic of Tanzania to track both on and off budget for reproductive maternal new-born and child Health.

  He remarked that key achievements had been realised in legislation, policies and strategies revolving on sexual reproductive health and rights.  The key priorities for the Financial year 2014/2015 include facilitation of the Partner States to implement the HIV and AIDS Legal and policy reform, and review the development of the second EAC Multisectoral Strategic Plan for HIV and AIDS, TB and STIs, 2015-2020.

The Minister elaborated some of the achievements in the education sector as the development of strategies towards harmonization of education systems and training curricula and the completion of rules and guidelines leading to the harmonization of the EAC Examinations and Assessments.

He noted that in a bid to operationalize the East African Science and Technology Commission (EASTECO), negotiations of the Headquarters Agreement between the EAC Secretariat and the Republic of Rwanda for hosting the Commission were concluded in October 2013 and the Headquarters Agreement signed in April 2014.

On immigration and labour, the Minister informed the House the region had remained focused on the internationalization of the New Generation e-East African Passport to take effect by November 2015.

‘I am happy to report that Partner States have commenced implementing the roadmap by incorporating the required budget proposals in the 2014/2015 FY for the procurement of the required  infrastructure  and  the  Passport booklets. The budget support for this subsector during the FY 2014/2015 will therefore focus on the implementation of the roadmap to facilitate the launch of the New e-passport by November 2015’, Hon Dr Abdallah remarked.

On the Political Federation,  the Minister denoted remarkable progress as having been realised.  He informed the House that a draft model of the structure of the EAC Political Federation was considered by the Summit of the EAC Heads of State and that national consultations of the model were conducted in all Partner States to enrich and improve the structure.  

He however said that finalisation and signing of the draft Protocol on Good Governance and the Protocol on Preventing and Combating Corruption had been very slow.   Other areas of intervention include the adoption of the Plan of Action on promoting and protecting human rights due for consideration and the EAC Bill of Human Rights currently undergoing assent.

The Minister affirmed that mobilisation, sensitisation and outreach targeting stakeholders in their diversity shall be the core of the work of the Community. In this regard, the 3^rd EAC Annual debate for University students is slated for September 2014.

The initiative seeks to create a critical mass of students’ ambassadors to advocate for EAC integration among their peers. Plans are underway to hold the 5^th EAC Conference on Good Governance as well as the EAC Dialogue on Political Integration. These events are effective in informing and sensitising stakeholders on political integration.

On the global outlook, the Minister stated that the region is projected to expand to 5.5% in 2014, up from 4.9% in 2013.  The Minister however reported of a significant drop in inflation from 8% in 2012 to 6.3% aided by monetary policy tightening and lower food prices associated with a recovery in local food production.

“Against this backdrop, global economic recovery is expected to improve in 2014, according to the IMF’s April 2014 World Economic Outlook. World output growth is forecast to strengthen from 3.0 percent to 3.6 percent in 2014”, Hon. Dr. Abdallah stated.

“Domestic factors will continue to drive Sub-Saharan Africa's long-term trend growth. East African economies are expected to pick up in 2014, riding on a strong performance expected in the agricultural, mining and energy sectors; and easing inflation across the region” he added.

-Ends-