Kenya to pay highest contribution to EAC budget in proposed new model
Kenya's Prime Cabinet Secretary and Cabinet Secretary for Foreign and Diaspora Affairs Musalia Mudavadi announced the proposed model to the Kenyan parliament on Thursday based on each partner state's average nominal GDP per capita for the past five years as assessed by the World Bank.
In this plan, East Africa's largest economy will contribute $12.1 million annually, (23.7 percent) to the EAC, based on an equal contribution of $8.5 million by each country. Tanzania will contribute $9 million, Uganda $8.5 million, Rwanda $8.3 million, South Sudan $6.6 million and Burundi $6.4 million.
The EAC is assessing the latest entrants, Democratic Republic of Congo and Somalia.
Currently, partner states contribute equally to the budget of the Community – $7,007,747.
The heads of state, at their 23rd Ordinary summit that met on November 24, 2023, agreed on a financing formula of 65 percent equal contribution by partner states and 35 percent assessed contribution.'On the basis of the proposed model, our computation shows that Kenya would make an additional contribution of $3.6 million, thus bringing her annual total contribution to $12.1 million, which accounts for 23.8 percent of the total annual budget for the Community,' Mr Mudavadi told MPs, when he appeared before the National Assembly Committee on Regional Integration.
The model is meant to address economic disparities among partner states while ensuring sustainable financing for EAC operations and programmes.'Certainly, the 65 percent equal and 35 percent assessed rule benefits smaller economies like Burundi, Somalia and South Sudan, which have struggled to meet traditional contribution requirements due to limited fiscal capacity and competing domestic priorities,' the minister said.
The framework aims to provide sustainable financing while ensuring that all partner states maintain ownership and responsibility for EAC operations and programmes.
The formula is expected to cure the budget deficit problem occasioned by poor remittances, with only $32 million having so far been paid out from a $56 million contribution target for the 2024/25 financial year.'In the last two decades, Kenya has contributed a total of $186 million to the EAC. These contributions are anchored on Article 132 (4) of the EAC Treaty,' Mr Mudavadi said.
The new proposal came after a study on the required reforms to align the EAC structure, programmes and activities with the financial resources available in partner states. This was to ensure sustainability of the Community while addressing the dependency syndrome.
The study identified key priority projects, programmes and activities that could be implemented with available resources now and in the future without slowing the integration momentum and constraints with the existing funding structure by partner states and development partners that causes delays and non-compliance.
The proposed hybrid model will be reviewed after three years of its implementation.
Mudavadi admitted that the EAC is facing a financial crisis, with the July 2025 staff salaries not paid.'Although the East African Legislative Assembly has passed a rationalised budget for the 2025/26 financial year, which is a total reduction of $20,000, translating into a reduced contribution per partner state to the Community of $2,500, the Community continues to struggle in its operations and the July salaries and other statutory obligations lay in abeyance,' the minister said. 'The Secretariat continues to struggle in its operations due to funding challenges as it has been borrowing from the confederation kitty, which is now exhausted.'The Chairperson of the EAC Council of Ministers, Beatrice Askul Moe, tabled before the Eala the budget estimates for the 2025/2026 Financial Year totalling $109.3 million.
So far, Kenya, Uganda, Tanzania, and Rwanda, have paid the full amount for the financial year 2024/25.
South Sudan had paid $300,000 as at July 15, 2025, DRC owed $20.7 million and Burundi $15.7 million for FY2024/25.
The EAC Secretary-General Veronica Nduva has dispatched debit notes to partner states with arrears.
© Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).
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