EAC's $138 million budget for fy 2012/2013 presented to EALA / Budget prioritizes consolidation of Customs Union, Common Market and cross-border infrastructure development programmes, among others
ARUSHA, Tanzania, May 24, 2012/African Press Organization (APO)/ -- nThe Chairperson of the EAC Council of Ministers and Minister for East African Community, Kenya Hon. Musa Sirma today presented Budget estimates for the 2012/2013 Financial Year totaling $138,316,455 to the East African Legislative Assembly meeting in Arusha.
The 2012/2013 Budget, up from $136.9m in the previous Financial Year, prioritizes consolidating the Customs Union; implementation of the Common Market Protocol; completion of negotiations on the East African Monetary Union Protocol; cooperation in cross-border Infrastructure; implementation of the critical activities of EAC Food Security and Climate Change Master Plan; implementation of activities of Lake Victoria Basin Commission namely water and sanitation for the 15 towns around the Lake and its catchment area.
The Council Chairperson highlighted a number of achievements registered in the FY 2011/2012, notably the expansion of the region's GDP by 5.9% in spite of a harsh economic environment marked by rising inflation and high fuel prices; plus sustained growth of intra-EAC trade, which he said now stands at over $4 billion having risen from $2 billion in 2005.
“The intra-EAC trade to total EAC trade has grown from 7.5% in 2005 to 11.5% in 2011. This means that the intensity of trade among Partner States is growing at a modest pace. The region has also started witnessing Partner States which were net intra-EAC importers start to become intra-EAC exporters,” Hon. Sirma stated.
“For example, the United Republic of Tanzania registered a surplus budget in its intra-EAC trade in 2010. This trend is principally due to coherent regional policy measures that have enabled EAC to fully implement a free trade regime coupled with continuous improvement in trade facilitation,” he added.
Presenting the Budget estimates, the Council Chairperson noted that among the identified priority areas, interventions in the Customs Union will focus on carrying out those activities that will enable the region to turn into a Single Customs Territory.Hon. Sirma observed that the Single Customs Territory “will crystallize the gains of integration characterized by minimal internal border controls and a more efficient institutional mechanism in clearing goods”.
He informed the House that a High Level Task Force comprised of experts from Partner States will, in July 2012, embark on an exercise to transform the EAC into a Single Customs Territory and a progress report will be made to the Summit in November this year.
On implementation of the Common Market Protocol, the emphasis will be on operationalization of the free movement of labor provisions, as well as the integration of the regional financial markets to allow for free movement of capital.
Cooperation in cross-border infrastructure development will see the commencement of construction of the Arusha-Holili/Taveta-Voi road; conclusion of detailed designs for the Malindi-Lunga Lunga-Holili-Bagamoyo road and development of One Stop Border Posts at Namanga, Rusumo, Holili-Taveta, Lunga Lunga-Horohoro, Kabanga-Kombero and Kagitumba.
The other activities that are planned in this area include completion of the detailed studies for the Dar-Isaka-Kigali/ Keza-Msongati railway; rail links between Kenya-Uganda and Uganda-Tanzania; strategies for harmonized EAC energy generation as well as construction of the three interconnectors already identified and; resource mobilization for Bujumbura port and the Mombasa and Dar es Salaam port rehabilitation projects.
Regarding ongoing efforts to establish a single financial market, the Council Chairperson noted that substantial progress had been made but added that Partner States need “to remodel their economic policies in a regional perspective with a view of creating robust frameworks for economic convergence, production of reliable comparable statistics, creation of a vibrant compliance and enforcement mechanism and independent institutions to support a robust East African Monetary Union”.
The FY 2012/2013 Budget will be financed by Partner State contributions through the Ministries of EAC ($35,375,722); Partner States through other agencies ($4,825,709); Development Partners ($97,079,329); and other income ($1,035,695).