Elijah Ntongai, a journalist at TUKO.co.ke, has over four years of financial, business, and technology research and reporting experience, providing insights into Kenyan and global trends.

Kenya has emerged as a key financial contributor to the East African Community (EAC) after consistently honouring its obligations.

Conversely, several other partner states face challenges in fulfilling their financial commitments, leading to a substantial budget deficit within the regional bloc.

As of June 2024, the EAC recorded total contributions of USD 39,825,033 (KSh 5.15 billion), which represents 77% of the targeted USD 51,464,868 (KSh 6.64 billion), with a deficit of over USD 35 million (KSh 4.52 billion).

Notably, Kenya has remained at the forefront, contributing a full 100% of its designated financial obligations.

The delay in contributions from several member countries, including the Democratic Republic of Congo (DRC), South Sudan, and Burundi, has left the EAC in an unsustainable financial position.

Speaking during the retreat of the National Assembly Committee on Regional Integration, Caroline Karugu, the principal secretary, State Department for EAC, noted that the delayed remittances by partner states to the EAC continues to be a source of concern.

"Several partner states have fallen behind in their financial obligations to the Community, creating operational challenges for EAC institutions and programs and affecting service delivery and the implementation of critical regional projects. We must work collectively to address this issue through exploring innovative financing mechanisms that can ensure financial sustainability," Karugu said.

As of the latest reports, DRC, which joined the community in 2022, and South Sudan had not made full contributions to the current financial year.

The issue of delayed contributions has posed significant operational challenges, hampering the timely execution of several crucial projects.

According to Karugu, these include vital institutions such as the Lake Victoria Basin Commission (LVBC) and the Lake Victoria Fisheries Organization (LVFO), which depend on financial support from EAC member states to carry out regional initiatives aimed at improving food security, environmental sustainability, and economic integration.

As Kenya continues to contribute its full share, the country has not only fulfilled its financial commitments but also played a pivotal role in funding and managing key projects in the Lake Victoria Basin.

The Kenyan government has provided land and resources for the construction of the LVBC headquarters and continues to support various regional development projects, including water resource management and climate change adaptation projects within the Lake Victoria basin.

The financial gap left by other countries has exacerbated the EAC’s budgetary challenges. For instance, Uganda and Rwanda's contributions were significantly lower than their expected shares, with Uganda’s contribution standing at 33% of its target, and Rwanda’s at just 12%.

This has created a strain on the community's ability to meet statutory obligations such as staff salaries and the effective functioning of its programs.

The supplementary budget request for 2024, amounting to USD 11,148,996 (KSh 1.44 billion), highlighted the urgent need for additional financial support, primarily from member states, to meet the operational costs of the EAC Secretariat and its organs.

The Kenyan government has urged other member states to prioritise the settlement of arrears to avoid further disruptions in the delivery of essential services and regional projects.

Source: TUKO.co.ke