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EAC Parliament Bets on $91m to Spur Regional Economic Growth

Sendy
July 1, 2021

The East African Community (EAC) has tabled a $91 million budget before the East African Legislative Assembly for the financial year starting July, which among other things, will prioritise the development of infrastructure and boost industrial growth in the regional economy.

The 2021/22 budget comes at a time when the Covid-19 pandemic has hit EAC economies hard, resulting in lockdowns that have hampered regional trade.

Containment measures to limit its spread, which include travel restrictions and lockdowns, led to a contraction of the economy in all the EAC partners.

Council of Ministers chairperson and Kenyan EAC minister Adan Mohamed said other priority areas in the budget include trade development, peace and security, private sector development and EAC digitalisation agenda.

"The reality is that Covid-19 will be with us for a much longer time than earlier anticipated. The impact of the pandemic on EAC partner states' economies has been devastating, to say the least," he said, adding that during the year 2020, exports of goods shrank in all EAC partner states.

Mr Mohamed said exports from Kenya and Uganda contracted by 7.6 percent and 1.7 percent respectively between March and June 2020, while imports of intermediate goods dropped by 25 percent, 11.3 percent and 22.9 percent in Kenya, Uganda and Tanzania respectively.

The minister said the industrial sector in Rwanda, Kenya and Uganda shrunk by 3.5 percent, 0.5 percent and 6.3 percent respectively.

"In addition, Covid-19 has led to deteriorating external positions in all EAC partner states on account of its adverse consequences on tourism and aviation sectors, workers' remittances, foreign direct investment and loan disbursements," he said.

The economic growth in the region, said Mr Mohamed, averaged 2.3 percent in 2020 compared to an average of 5.4 in 2019.

This year's budget is lower than the $97.6 million that the EAC parliament approved for the 2020/2021 fiscal year.

The 2021/22 budget is allocated to the EAC organs and institutions as follows: EAC Secretariat $43.8 million East African Legislative Assembly $15.4 million, East African Court of Justice $3.7 million, Lake Victoria Basin Commission $8.1 million, East African Science & Technology Commission $1.5 million and East Africa Kiswahili Commission $1.2 million.

Others are East Africa Health Research Commission $1.8 million, East African Competition Authority $1 million, Inter-University Council for East Africa $11.1 million and Lake Victoria Fisheries Organisation $3.6 million.

Growth in the EAC region is expected to recover in 2021, reflecting a resumption of global economic activity with the easing of containment measures and sustained implementation of growth-supporting measures.

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