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Tanzania’s earnings from agencies cause disquiet among EAC partners

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FRED OLUOCH

By FRED OLUOCH
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The East African Community needs to address the disproportionate gains that Tanzania gets from hosting most of the trading bloc’s agencies, particularly Dar es Salaam’s 73 per cent earnings from the $31.5 million annual average budget of the organs.

All EAC partner states contribute equally to the bloc’s budget through annual subscriptions.

A new report by the EAC secretariat has revealed that Tanzania earns $23 million from hosting five of the eight EAC organs, much more than Kenya, which earns $4 million, Uganda $3 million, Rwanda $1 million, and Burundi which receives $500,000.

The report, however, notes that Kenya gains the most from trade within the EAC, earning $38 million annually, followed by Uganda ($22 million) and Tanzania ($15 million).

Rwanda, Burundi and South Sudan make net losses from trading with the region, according to the draft report titled Equitable Sharing of Benefits and Costs of EAC Integration Process.

“Given the current reality and lessons from the former EAC community, which collapsed mainly as a result of unequal share of benefits, there is a need to share the costs and benefits in a fair and equitable manner for sustainability of the EAC Community which generates far more benefits than the costs,” states the draft report.

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It further states that provisions in the EAC Treaty such as equal contribution to the EAC budget “may no longer be sustainable given the huge differences in population size and GDP of partner states”.

The draft report, which is yet to be approved and adopted, proposes a review of the formulae for equitable sharing of costs and benefits.

Tanzania’s benefits from the five organs that it hosts come from local employment, rent income and supplies. The five are the secretariat, the East African Court of Justice, the East African Legislative Assembly, the East African Kiswahili Commission, and the Competition Authority.

Uganda hosts the East African Development Bank, the Lake Victoria Fisheries Organisation, the Inter University Council of East Africa, and the Safety Oversight Agency.

Kenya hosts the Lake Victoria Basin Commission, Rwanda the East African Science and Technology Commission and Burundi hosts the EAC Health Research Commission.

The study was commissioned after the EAC Council of Ministers at its 18th meeting held in Arusha on September 4, 2009, observed that to actualise the fundamental and operational principles of the EAC required equitable distribution of benefits accruing to or to be derived from operation of the Community.

The EAC secretariat, in an interview on Friday, insisted that the draft report is yet to be finalised and could not therefore publicly discuss its findings.
“This [the earnings by Tanzania] is the percentage of gains from hosting EAC organs and institutions only. It does not include gains from trade where Kenya benefits most,” said Aime Uwase, the EAC principal planning and research officer in a response.

Further studies are ongoing to quantify other benefits from hosting and implementing various protocol provisions under the Customs Union and the Common Market, according to Wilberforce Mariki of the EAC secretariat.

The EAC, initially made up of Tanzania, Kenya and Uganda, broke up in 1977 after the then-socialist Tanzania complained that capitalist Kenya was benefiting more than the other two partners.

Other issues that caused the collapse included Kenya’s demand for more seats than Uganda and Tanzania in decision-making organs, and disagreements with Ugandan dictator Idi Amin who demanded that Tanzania as a member state of the EAC should not harbour forces fighting to topple his government.

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The disparate economic systems of socialism in Tanzania and capitalism in Kenya also contributed to the fall.

Kenya had a more developed manufacturing sector than Tanzania and Uganda, resulting in large income transfers from Dar es Salaam and Kampala.

The report observes that regional integration, by its very nature, creates imbalances in gains if partner states do not take effective measures to maximise the prospective and potential benefits and minimise costs.

The overall objective of the study was to assess whether there is equitable sharing of costs and benefits of the EAC integration so far, and provide a remedial mechanism where possible.

The study suggested that EAC institutions and organs allocate jobs equitably and sustainably as per the Treaty provisions as integration deepens.

The study also suggested that job distribution should be proportional to partner states’ contribution to the EAC budget.

High profile and technical jobs should be competitively awarded, and others should be rotational and allocated on a quota basis.

The study suggests a review of the current system of equal contribution to the EAC budget by partner states, given that they are structurally different in terms of GDP, imports, exports to the region and population.

It suggests that partner states can contribute based on their capacity to pay as represented by GDP. This mode of financing has been successfully used by the Southern African Development Community, the African Union, the Caribbean and Pacific Group of States, and the Organization of American States.

Partner states with bigger economies and population are seen to benefit more, or the impact of integration could be higher in bigger economies than smaller ones. But sharing costs based on GDP remains a parameter that relatively satisfies the principle of solidarity, equity, balance and mutual benefit.

The partner states’ contribution to the 2018/19 total budget was $56,245,162 (56 per cent of the total budget) through the respective ministries of EAC Affairs ($50,227,920), the ministries responsible for education ($4,466,210) and ministries responsible for fisheries ($1,551,032).

Development partners will contribute $42,925,613 to the budget, and member universities will give $333,970. The miscellaneous revenue is pegged at $265,971.

The percentage contribution to the budget by EAC partner states has been increasing over time. It increased from 10 per cent in 2011/12 to 56 per cent in 2018/19.

The analysis of contribution per capita shows a big gap, from $0.94 (Burundi) to $0.19 (Tanzania).
As a result of reforms, trade within the EAC has increased. Intra-EAC trade was $1.7 billion in 2005, rising to $3.5 billion in 2013 and falling to $2.4 billion in 2017.

The report says the shrinking of trade among partner states since 2015 may be as a result of national production patterns becoming more similar, and movement of capital investments where products are manufactured locally.

The EAC intra-trade share is below 20 per cent, compared with the EU where it is 61.7 per cent. Among the members of the North American Free Trade Agreement, the share is 50.3 per cent and 24.3 per cent within the Association of Southeast Asian Nations.

The elimination of tariffs on intra-EAC trade led to an average annual loss of Customs duty of $1,689.07 million between 2013 and 2017.

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Labour court kicks out Mary Wambui : The Standard

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The Labour Court has nullified the appointment of former Othaya MP Mary Wambui (pictured) as chairperson of the National Employment Authority (NEA) board.
Justice Onesmus Makau yesterday said Wambui was unqualified and dismissed her appointment as irregular and unconstitutional as she does not meet the qualifications for the position.
The court quashed the Gazette notice on the appointment, with Justice Makau saying the authority needs a person with academic expertise.
SEE ALSO :Kenyans mock ex-MP Mary Wambui’s appointment”Her appointment to the board does not meet the constitutional requirements; it is therefore null and void. The Gazette notice is quashed. It is unlawful. A permanent injunction is issued barring her from being appointed to the post,” ruled the judge.
The case was filed by Kenya Young Parliamentarians Association, a lobby headed by Nairobi Senator Johnson Sakaja.
According to the lobby, the former MP had severally admitted that she had limited education background.
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Section 10(2) of the National Employment Authority Act provides that a person shall be qualified to serve as the chairperson of the board if they have at least seven years’ experience in Human Resource Management or its equivalent.
However, there is no age limit.
SEE ALSO :A country of old peopleThe court heard that she did not have academic and professional qualifications to allow her run the office.
In a Gazette notice dated October 14, 2019, then Labour CS Ukur Yatani picked Wambui for the job, triggering an outcry from Kenyans.
Following the appointment, Wambui was expected to lead a team that will create job centres in all constituencies where youths would register, detailing their skills.
The authority is also expected to be a link between employers and potential employees by posting available vacancies on social media. 

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Rwanda sets aside $10m for CHOGM sprucing of Kigali

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MOSES K. GAHIGI

By MOSES K. GAHIGI
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Rwanda is pulling all stops in its preparations to host the 26th Commonwealth Heads of Government Meeting (CHOGM) slated for June 22 to 27. The biennial summit was last held in East Africa in 2007 in Kampala.

The government has set aside up to Rwf10billion ($10.5 million) to improve and build infrastructure needed for the event.

“We have various committees working on the different aspects of CHOGM preparations, from infrastructure, hotels, to protocol, we are moving well and we have put up various mechanisms to ensure that we are ready by that time,” said Rwanda’s Minister for Foreign affairs Vincent Biruta.

Kigali will be the biggest beneficiary as authorities construct inter-city and connecting road network roads that will see the free flow of traffic.

There is new Mulindi Road, Kabeza-Alpha Palace Road, Rwandex Network Road, Nyabisindu-Nyarutarama Road and Migina Network Road connecting Gasabo district headquarters to Sports View Hotel.

All the roads under construction are situated in areas surrounding the airport, and are aimed at decongesting the main Kigali International Airport Road, which will be mostly used during the event.

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“We have different on-going construction projects around the city, many of which are infrastructure, we are also working on recreational sites and green parks such that guests have a great experience. Preparations are at 55 per cent,’’ said Ernest Nsabimana, City of Kigali vice mayor.

Up to 10,000 delegates from all the 53 Commonwealth countries are expected to attend the event. It is expected that the event will stretch the limit of city’s roads, conference venues as well as accommodation.

The Rwanda Convention Bureau did not respond to our questions on the progress on ensuring that the country has adequate accommodation for the CHOGM delegates at the time of going to press.

But it is expected that the existing high-end conference facilities like the Kigali Convention, the Kigali Conference and Exhibition Village, Intare Arena will all be put to good use.

The airport is key in the CHOGM preparation process, and currently the construction and modifications are ongoing to increase the number of parking space for aircraft and passengers lounge at the terminal.

“The event is expected to raise Rwanda’s profile as a tourism and MICE destination, and the country already has up to 25 events lined up for 2020.

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IPOA launches investigations into Majengo, Mwiki killings by police

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The running battles between police and irate demonstrators in Kasarani and Mwiki areas this week resulted in the death of one person who is alleged to have been shot dead by anti-riot police officers.

Following public outcry, the Independent Policing Oversight Authority has launched investigations into the incident.

In a statement, the authority says it has deployed a Rapid Response team to institute investigation into the incident and another separate one where police are said to have shot dead a young man on 16th January in Nairobi’s Majengo estate. 

IPOA says it seeks to establish circumstances that led to the shootings and if the security officers were justified to use excessive force.

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It is after the intense investigations that the authority will forward its recommendations to relevant institutions for further action. 

The policing oversight body assured the public of its commitment to ensure independent, impartial and fair investigations.  

 

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