EAC to be free from donors: EAC plans to fund itself through import tax

[AfPoliFed]

By LUCAS BARASA, Daily Nation

The East African Community is looking for
ways of funding its own activities to be
self-reliant.
Deputy Secretary General Jean Claude
Nsengiyumva said since EAC is working on
a fully-fledged single customs territory, it
is crucial for it to fund itself.
Mr Nsengiyumva said the issue of funding
would feature prominently during the
Heads of State and Government extra-
ordinary meeting in April.
Mr Nsengiyumva said during an interview
in Bujumbura that his priority since taking
office has been seeing how EAC is funded.
“Currently the budget of the Community is
funded by equal contributions by the
Partner States and receipts from regional
and international donations and the
development partners” he said.
Most of the EAC projects are still being
funded by donors with the EAC budget
being approximately US$130-140 million
which is not enough to implement all the
projects and the programmes of the
community.
“Due to the limited resources, we have
been funding our projects by prioritizing
the most crucial ones,” he said.
He said proposals have been made to the
regional body to start funding itself
through one percent tax on all imports
from outside the community.
He said the proposal was sent to the EAC
Council Ministers and forwarded to
November 2013 Summit of the Heads of
State.
FINANCIAL SOLIDARITY
The EAC secretariat was instructed to
propose a financing mechanism including
the option of one percent tax on imports
from outside the community while bearing
in mind the disparities in economies of the
member states, Mr Nsengiyumva said.
“The secretariat will have to consider a
principle of financial solidarity and equity
so that the economies are not looked how
weak or how strong they are,” he said.
He added: “We are all one people with one
destiny. We also have to consider the
equity and solidarity so that partner states
will feel comfortable in their respective
economies that they are also equally
treated. That is the assignment given by
the heads of state in their wisdom.”
“The secretariat is now working to improve
the proposal and once the proposal is
adopted, EAC will change drastically and
look like any other developed region,” he
said.
A survey has shown that EAC could collect
US$134 million if the one percent tax on
imports is implemented.
The secretariat is said to be working on a
better mechanism whereby the money will
be collected and transferred to a specific
account of the EAC.
Mr Nsengiyumva said a lot of progress has
been made on developing the optional
sustainable mechanism for EAC to fund
itself.
“It is a revolution for EAC to fund itself.
The pledges and contribution of the
development partners have started
decreasing,” he said.

comments

Raiyaa • 19 hours ago
hmmm, sounds like a good idea but is
it achievable? I bet the donors would
do everything to make it a failure