EAC faces budgetary constraints due to COVID-19

The 40th EAC Ordinary Council of Ministers recently approved a budget of approximately $90 million for the financial year 2021/2022 to support the activities of the East African Community (EAC), its organs, and institutions. However, concerns have been raised by the East African Legislative Assembly (EALA) that this budget falls short of what is required to achieve the community's objectives and may also have implications for the Democratic Republic of Congo's (DRC) potential entry into the bloc. Policy analyst David Wallachira shed light on the challenges facing the EAC during an interview on CNBC Africa. He highlighted the impact of ongoing budget constraints stemming from the COVID-19 pandemic, which has led to economic disruptions across the region. The restrictive measures implemented to curb the spread of the virus, such as limitations on movement and trade, have hampered revenue generation for member countries. Wallachira emphasized the need for a closer examination of the budget allocations for each member state within the EAC. While countries like Kenya have larger budgets, there are discrepancies in the availability of funds for expenditure. He noted that some allocated resources are in non-cash forms, limiting the actual financial capacity of certain nations. Furthermore, Wallachira pointed out a shift towards increased social expenditure within the EAC as countries strive to support vulnerable populations and mitigate the economic impacts of the pandemic. However, he expressed concerns about the financial challenges faced by member states in meeting their budgetary commitments to the EAC. Regarding the potential entry of the DRC into the EAC, Wallachira discussed the ongoing assessment process by the council to determine the country's eligibility for membership. While acknowledging the benefits of incorporating a large market like the DRC into the bloc, he stressed the importance of conducting a thorough cost-benefit analysis before approving new members. The interview also touched upon the political considerations surrounding the DRC's application, including historical conflicts with existing EAC nations and outstanding financial obligations, such as war reparations owed by Uganda to the DRC. Despite these challenges, Wallachira remained optimistic about the prospects of DRC's accession and highlighted potential economic opportunities for both the country and the EAC. In conclusion, the EAC faces significant financial constraints exacerbated by the COVID-19 crisis, raising concerns about the bloc's ability to meet its operational requirements and accommodate new member states like the DRC. As member countries grapple with internal budgetary pressures, finding a sustainable funding model for the EAC remains a pressing challenge that will require collaborative solutions among all stakeholders.