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Kenya to pay lion’s share of EAC budget in new system – Business Daily

The EAC countries’ flags: The official story is that integration will place the region on a stronger pedestal. FILE
Kenya will pay the lion share in financing of the East African Community (EAC) budget that will now be based on the size of a country’s economy under a new hybrid system.
The EAC Sectoral Council on Finance and Economic Affairs (SCFEA) chaired by Treasury Cabinet Secretary Ukur Yatani has agreed on a hybrid model of financing that will see countries pay an equal amount for 65 percent of the budget while the remaining 35 percent will be based on the country’s GDP.
Kenya is an economic power house in the bloc with a GDP of $100 billion followed by Tanzania at $55 billion and Uganda at $32 billion.
Currently, partner states contribute equally to the budget of the Community as outlined in the EAC Treaty, which further provides for sourcing of additional funding from development partners.
The agreement on the new model came after the findings of a study on the required reforms to align the EAC structure, programmes and activities with the financial resources available from EAC partner states to ensure sustainability while addressing the dependency syndrome.
The agreement came after deliberations in a meeting held in Mombasa this week where its was agreed that the proposed hybrid model will be reviewed after three years of its implementation and the EAC Secretariat was directed to implement measures to ensure that the cost of running the Community is as low as possible.
Speaking at the opening session of the Mr Yatani, underscored the importance of a sustainable financing mechanism for the EAC Budget.
“Let us discuss objectively and guide the Council on the appropriate mechanism for financing the Community in a sustainable manner,” said Mr Yatani.
EAC Secretary-General Peter Mathuki said the current model of funding the EAC budget is not sustainable.
“For a long period, we have noted and discussed the need to find sustainable financing mechanism in order to ensure that our community is able to take full charge of its integration agenda,” said Mr Mathuki.

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