EAC borrows Sh85.3 million internally amid deepening financial crisis
Reports by The Citizen indicate that only Kenya, Tanzania, and Uganda have contributed their required $7 million (Sh903.8 million) share towards the EAC's budget for the 2024/25 financial year, despite all member states being expected to contribute equally.
The East African Community (EAC) has borrowed $660,960 (around Sh85.3 million) from five of its own institutions to fund essential operations, including the processing of the 2025/26 budget and supplementary expenditures for the 2024/25 financial year, amid a deepening financial crisis.
Approved by the EAC Council of Ministers, the internal borrowing, necessitated by delays in several partner state contributions, will finance virtual sessions of the East African Legislative Assembly (EALA).
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The announcement was made by EAC Deputy Secretary General for Customs, Trade and Monetary Affairs, Annette Mutaave Ssemuwemba, in a memo dated May 30, 2025.
"The Council observed, among others, the dire financial situation of the Community occasioned by non-remittance and delayed remittance of contributions by some Partner States," she said.
Further, the memo ordered the EAC Secretariat, the East African Health Research Commission, the East African Kiswahili Commission, the Inter-University Council for East Africa and the EAC Competition Authority to channel the required funds staraight into EALA's bank account no later than May 2025.
The Council also directed the Secretary General to gradually deduct the borrowed funds from upcoming financial allocations by partner states to EALA.
The move is one of many measures the regional bloc is trying to implement to keep its operations afloat amid severe underfunding.
Reports by The Citizen indicate that only Kenya, Tanzania, and Uganda have contributed their required $7 million (Sh903.8 million) share towards the EAC's budget for the 2024/25 financial year, despite all member states being expected to contribute equally.
By April 25, 2025, only Kenya, Tanzania, and Uganda had fulfilled their financial obligations to the EAC, with Uganda even surpassing its target by contributing $7.16 million (approx. Sh924.4 million), 2 per cent above its required share.
Somalia had paid half of its expected amount at $3.5 million (around Sh451.9 million), while contributions from the Democratic Republic of Congo and South Sudan remained low at just $1 million (around Sh129 million) and $500,000 (around Sh64.5 million), respectively. On the other hand, Burundi has contributed just 19 per cent of its expected contributions at $1.3 million (Sh167.8 million).
Despite some progress in current-year contributions, EAC remains weighed down by substantial unpaid arrears that continue to cripple its financial health.
Kenya is the only member to have fully cleared its arrears, while Tanzania owes $122,694 (Sh15.8 million). Additionally, the DRC, Burundi and South Sudan top the list of defaulters, owing $20.7 million (Sh2.7 billion), $15.8 million and $15.1 million (Sh1.94 billion), respectively.
Somalia and Rwanda owe arrears of $3.5 million (Sh451.9 million) and $1.8 million (Sh232.4 million), respectively. Experts warn that the persistent funding gap is hampering operations, delaying key projects, and demoralising staff.
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