South Sudan & Burundi face deadline over EAC annual payments

The East African Community is facing a financial crisis as two of its member states, Burundi and South Sudan, have chronically defaulted on their annual payments, leading to severe liquidity challenges. By August 4th, South Sudan owed the community more than $24 million, while Burundi's outstanding debt amounted to $6.5 million. CNBC Africa's Fiona Muthoni recently interviewed economic analyst Odhiambo Ramogi to shed light on the implications of this financial predicament. The situation has prompted calls for sanctions against the delinquent nations, as the failure to meet financial obligations undermines the fundamental principles of the EAC. The Treaty of the East African Community stipulates that member states must contribute towards the costs incurred by the secretariat and fulfill their financial obligations to the institution. While countries like Kenya, Uganda, Tanzania, and Rwanda have met their payment obligations, Burundi and South Sudan have fallen short. Despite facing economic challenges exacerbated by the COVID-19 pandemic, the two countries have failed to uphold their financial commitments, creating a strain on the organization's operations. The East African Legislative Assembly has highlighted the importance of enforcing disciplinary measures to address the recurring issue of non-payment by Burundi and South Sudan. The lack of timely contributions from these nations has raised concerns about their commitment to the EAC's objectives. While smaller in economic stature compared to other member states, both countries are expected to fulfill their outstanding budgetary contributions by September 15th, as per the ESC's directives. In accordance with Article 143 of the EAC Treaty, the organization is empowered to impose sanctions on member states that fail to meet their financial obligations. However, the specifics of the sanctions are not explicitly outlined in the treaty, leaving room for interpretation. The efficacy of punitive measures in compelling compliance remains a subject of scrutiny, given the limited guidance provided in the treaty. Looking ahead, the EAC is set to unveil its financial budget estimates for 2020-2021, with a focus on critical areas such as healthcare and regional trade. The ongoing COVID-19 pandemic has underscored the importance of bolstering healthcare infrastructure within the region, reducing reliance on external medical services. Additionally, efforts to enhance intra-regional trade will be a key priority in the upcoming budget, signaling a commitment to economic integration and prosperity. Moreover, the persistent challenge of water resource management, particularly the Nile Agreement, looms large in the region. With Ethiopia's construction of the Grand Ethiopian Renaissance Dam stirring tensions among riparian states, including Sudan and Egypt, the EAC's budget allocations will be closely scrutinized for provisions addressing water security and sanitation initiatives. The delicate balance of navigating regional hydro-politics while promoting sustainable water use will be a critical aspect of the EAC's strategic agenda moving forward.