East African Community Implements Stricter Financial Accountability Measures
Leaders of the East African Community (EAC) have established new rules designed to hold member states accountable for outstanding financial contributions, a move that sets a significant precedent, particularly for nations with the largest arrears. The decisions, made on March 7, include a concession on a portion of the accumulated debt, alongside a two-year timeline for clearing the remaining balance.
The 25th Ordinary Summit of EAC Heads of State, held in Arusha, Tanzania, saw the rotation of the bloc’s chairmanship from Kenya’s President William Ruto to Uganda’s President Yoweri Kaguta Museveni. The EAC currently comprises eight member states: Burundi, the Democratic Republic of Congo, Kenya, Rwanda, Somalia, South Sudan, Tanzania, and Uganda.
Members of the East African Legislative Assembly (EALA) have welcomed the stricter accountability measures. Fatuma Ndangiza, an EALA member, emphasized that fulfilling financial obligations is a fundamental commitment for countries signing the EAC Treaty. “Whenever a country joined the EAC, it was required to contribute $7.2 million annually in line with the EAC Treaty. However, only four countries are contributing,” she stated. Ndangiza highlighted that some nations, like the Democratic Republic of Congo, have never made any payments since joining, deeming this approach unsustainable and advocating for the accountability of “chronic defaulters.”
Reports indicate that Rwanda, Tanzania, Kenya, and Uganda have reportedly settled their contributions for the 2025/26 financial year in full. Despite this, only approximately 37 percent of the total expected contributions for the same period have been received.
Addressing the Mounting Debt Crisis
The issue of unpaid membership dues has severely hampered the EAC’s operational capacity. President William Ruto, addressing the summit, underscored the detrimental impact of these arrears on the bloc’s effectiveness. As of January 31, 2026, member states collectively owed the EAC an estimated $89.37 million.
The Democratic Republic of Congo stands as the largest debtor, with arrears amounting to approximately $27.7 million, having made no contributions since its admission to the bloc. Burundi follows with $22.7 million in arrears and has not paid its contributions for the current financial year. South Sudan owes $21.8 million, and Somalia has a debt of $10.5 million. Notably, Somalia has failed to meet its current financial obligations despite having previously held the chairmanship and a Deputy Secretary-General position within the EAC.
EALA member Fatuma Ndangiza described the arrears as “paralysing the East African Community” and deemed the introduction of penalties as “timely.” The financial shortfall has already led to tangible consequences, including delayed staff salaries, postponed meetings, and stalled projects. EALA itself was compelled to suspend its activities during the first half of 2025 due to the financial strain. Ndangiza noted that the “Community was paralysed. EALA was not operating effectively. Projects were not running. Fifty per cent of member states were not paying contributions.” She also confirmed that the Council of Ministers is tasked with developing penalties for members who fail to clear their arrears within the stipulated two-year period.
The Suspension and Expulsion Framework
The Council of Ministers is in the process of finalizing a comprehensive “suspension and expulsion” framework. This framework will provide the legal basis for suspending or even removing member states that persistently default on their financial obligations. The Council is moving to enforce rules that would allow for the suspension of a member state that has failed to meet its financial commitments for 18 months or longer.
“At least sanctions are now guaranteed,” Ndangiza stated, adding that announced penalties include the loss of eligibility for key leadership positions within EAC institutions. Member states failing to clear their arrears will be barred from holding significant roles such as EAC Secretary-General, Deputy Secretary-General, Speaker of EALA, or top leadership positions in entities like the Inter-University Council for East Africa (IUCEA) and the East African Court of Justice (EACJ). This measure aims to prevent countries with outstanding debts from benefiting from the bloc’s resources and influence. Previously, countries like Burundi held key positions in the EACJ, EALA, and IUCEA, while Somalia served as Deputy Secretary-General despite its unfulfilled financial commitments.
A New Formula for Sustainable Financing
In addition to addressing arrears, regional leaders have agreed to a revised funding formula that links member contributions more closely to their economic capacity. This move aims to create a more equitable and sustainable financial model for the bloc.
The previous funding formula, adopted in 2023, allocated 65 percent of the $67.7 million budget to be shared equally among member states, with the remaining 35 percent based on economic strength. However, this system proved insufficient in resolving the persistent issue of unpaid contributions.
The new formula, effective July 1, divides the $67.7 million budget into two equal halves. Approximately $33.9 million will be distributed equally among all member states, meaning each country will contribute around $4.2 million. The remaining half will be allocated based on economic capacity, calculated using the average nominal GDP per capita over the preceding five years, with data sourced from international financial institutions like the World Bank and the International Monetary Fund. Consequently, wealthier economies will bear a larger share of the financial burden, while less developed economies will contribute less.
Enhancing Decision-Making Efficiency
Historically, EAC decisions were made through consensus, a process that often led to delays and stalled progress, as a single member state could veto proposals. This consensual approach proved cumbersome, hindering the bloc’s ability to respond effectively to regional challenges. For instance, a proposed amendment to the East African Community Customs Management Act, 2004, aimed at extending the time for clearing goods from ports, failed to pass due to the objection of a single country, despite its potential to reduce costs for businesses and consumers.
To overcome these obstacles, decision-making processes have been reformed, shifting from absolute consensus to a 65 percent majority vote for specific matters. This reform is expected to expedite the decision-making process, enabling the EAC to implement policies and projects more efficiently. Regional economic analyst John Bosco Kalisa described the new voting rule as a “positive reform that would speed up decision-making,” noting that the previous model was “too cumbersome and bureaucratic, delaying many projects.” He believes that effective implementation will “fast-track decisions and have a meaningful impact.”
Remuneration Reforms for EALA Members
A significant reform concerning the remuneration of EALA members has also been implemented. Members of EALA will now receive their salaries from their respective national budgets rather than from the EAC’s central budget. This decision was influenced by concerns that some countries have representatives in key EAC institutions who are paid salaries while their home countries are failing to meet their financial obligations to the bloc.
The Council of Ministers is expected to provide further guidance on the implementation of this reform by December 2027, including its implications for the EAC Treaty. Kalisa supports this move, arguing that it will reduce the burden on the EAC Secretariat and ensure that governments hold their representatives accountable for their duties. He also suggested that reducing the size of EALA could further improve its efficiency.
Regarding the chronic debt issue, Kalisa reiterated the need for strict penalties and suggested that the EAC should explore diversifying its revenue sources beyond member contributions. He proposed innovative solutions such as a “0.2 percent levy on imports destined for the region” to ensure stable funding, warning that without such measures, even current proposals might falter given the high external debt levels faced by many member states.
