Chronic non-payment is crippling EAC’s integration process

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OPINION

By Ronex Kisembo Tendo (PhD)

Article 5 of the East African Community Treaty commits partner states to establish a Customs Union, a Common Market, a Monetary Union and ultimately a Political Federation. That ambition now confronts a fundamental constraint: The Community’s financial sustainability.

The March 7, 2026, Heads of State Summit in Arusha will test whether the bloc can finance the integration it proclaims. Its financial foundations are under severe strain, placing decades of progress at risk. What began as a progressive and institutionally ambitious partnership is edging toward dysfunction as the political will to meet collective financial obligations erodes. At the centre of this crisis lies a deepening financing shortfall.

The bloc’s budget is projected at nearly $109 million for the 2025/26 fiscal year, covering the Secretariat, regional court, legislative body and other key institutions of the Community. Yet the EAC faces a cumulative budget gap of at least $89 million. President William Ruto, the current EAC Chair, has called an emergency Summit of his colleague Heads of State of partner states to confront this widening deficit. The scale of the problem cannot be understated.

Only Kenya and Tanzania have fully paid their annual contributions for the current financial year. The remaining partner states have left the bloc dangerously underfunded. The shortfall has paralysed core functions of the Community, stalled programmes, undermined key institutions and weakened the Secretariat’s ability to implement agreed priorities.

This pattern is neither new nor isolated. As recently as 2025, members collectively owed the EAC tens of millions of dollars. Among the largest defaulters were; the Republic of Burundi, the Democratic Republic of Congo and the Republic of South Sudan. Other economies, such as Rwanda and Uganda, have also struggled with timely remittances in past cycles.

Institutional Paralysis. Budget shortfalls have disrupted the operations of key organs, including the East African Court of Justice and the East African Legislative Assembly. The Court has suspended sessions, delaying the administration of justice. The Assembly has scaled back its sittings and committee work due to funding constraints.

Weakening Secretariat Capacity. The EAC Secretariat, headquartered in Arusha and responsible for executing Community programmes, has halted critical projects and frozen recruitment. Salary obligations, programme rollouts and the expansion of integration initiatives have all been negatively affected. Operational uncertainty erodes morale and institutional effectiveness.

Undermining Integration Momentum. The Community has made notable progress on frameworks such as the Customs Union and the Common Market. Yet financial non-compliance undermines these frameworks in practice. Trade facilitation, infrastructure planning, health coordination and cross-border mobility require predictable financing. Without it, commitments remain largely declaratory while implementation stalls.

Persistent Inequities in Contribution and Representation. The EAC’s financial model has struggled to adapt to its expanding membership. Originally designed when the bloc comprised only Kenya, Tanzania and Uganda, the equal contribution requirement of roughly $7 million per member has become increasingly unsustainable as new members with divergent economic capacities joined.

Countries facing structural fragility and security pressures have often received waivers or extended timelines for contributions. While such flexibility may support gradual integration, it also generates political tension. Questions arise when states that are chronically in arrears are considered for senior leadership roles, including the post of Secretary General of the Secretariat. The issue of fiscal compliance is likely to surface sharply at the Arusha Summit.

Frayed Trust Among Partner States. Persistent financial non-compliance has bred mistrust within the bloc. Repeated failure to meet obligations casts doubt on the sincerity of political commitments to integration. This complicates negotiations on deeper cooperation, including the long-term aspiration of political federation.

Lessons from Other Blocs. The experiences of the Southern African Development Community (SADC) and the Economic Community of West African States (ECOWAS) illustrate the consequences of weak financial discipline. Both have grappled with arrears that constrained programming and fueled criticism that regionalism remains aspirational rather than operational. By contrast, the European Union maintains mandatory contributions backed by enforcement mechanisms, sustaining institutional continuity despite political divergence among member states.

A Call for Reform and Responsibility. The upcoming Summit must confront both the structural and political dimensions of this crisis.

A revised financing formula is essential. Contributions could be recalibrated according to economic capacity, GDP size or measurable integration impact. At the same time, sanctions for chronic default, as provided under the EAC Treaty, should be considered to preserve institutional integrity.

This persistent non-compliance reveals a structural flaw in EAC’s equal-contribution financing model. Integration cannot survive on declarations alone. It requires enforceable commitments and predictable financing. The rhetoric of integration must align with financial reality.

If East Africa is to realise its ambitions, from free movement of goods and people to eventual economic federation, Partner States must demonstrate commitment through timely and adequate funding. Integration cannot survive on declarations alone. It requires sustained and predictable investment in the institutions that make it possible.

The writer is the Group CEO Afrika Mashariki Fest