The Government of Tanzania has rejected a request by the East Africa Legislative Assembly (EALA) to borrow about $2m from the general reserve account to pay allowances for lawmakers.
“With regret, I wish to inform you that the United Republic of Tanzania was not consulted and in that respect has not consented to the borrowing of $1.5m and $165,339 from IUCEA and LVFO, respectively,” said Tanzania’s Foreign Affairs Ministry spokesperson, Amb Wilbert Ibuge in a letter to EAC SG Liberat Mfumukeko dated Sept.10, 2020.
Amb Ibuge said while Tanzania was fully committed with ensuring EAC secretariat delivers on its mandate, “it is imperative that efforts be redoubled to ensure a sustained flow of partner states’ contributions, including by way of direct engagement with concerned partner states to as to allay the recurrent practice of borrowing funds elsewhere, a situation that is essentially unsustainable.”
It all started on August 20 with EALA Speaker, Martin Ngoga (Rwanda) writing to Mfumukeko, saying the Council of Ministers had on August 4 directed the office of the Clerk to record “eligible expenditure from the amount of $2.1m as a liability and settle it as partner states disburse their outstanding contribution for the financial year 2019/20.”
Ngoga further said the EALA commission had on August 10 directed the clerk to “partially settle to a tune of $590,780 out of $679,651 recently received from Burundi to offset the members’ daily subsistence allowance arrears and the remaining $106,871 to partially settle the outstanding obligations.”
ChimpReports understands that earlier, the Clerk partially settled $584,000 as part of the lawmakers’ allowance arrears for virtual meetings held during the COVID-19 pandemic period (March-June).
As if this was not enough, Ngoga, whom officials say has failed to properly run the regional legislature, raised a new memo, requesting an additional $1.6m from the EAC General Reserve Account and funds received by the Inter-University Council for East Africa and Lake Victoria Basin Commission to settle the outstanding balance of allowance arrears to members.
On September 9, Rwanda’s Foreign Affairs Minister, Vincent Biruta, who doubles as the chairperson Council of Ministers, endorsed Ngoga’s request to borrow the funds – touching off a firestorm in the EAC.
“I wish to inform you that after consultation with the members of the Council as per regulation 32 (2) of the EAC Financial rules and regulations (2012), I hereby authorize the borrowing of $1,519,031 and $165,339 from IUCEA and LCFO respectively for the stated purpose (payment of outstanding balance of arrears to EALA members) and request to refund such amount once the liquidity challenge improves,” said Biruta in a letter to Mfumukeko.
“This borrowing should be tabled to the next meeting of the Council for respective approval,” said Biruta.
This move is said to have rattled Tanzania whose President Magufuli has previously warned EALA against wastefulness.
Amb Ibuge warned that it would not be “prudent to direct the respective institutions to transfer the funds.”
An accountant and multiple senior EALA officials told ChimpReports that the regional body’s greed for money threatens the future of the East African Community.
“We have never seen in our lifetime such a greedy Parliament,” said an official who preferred anonymity to speak freely.
The EAC has three Organs (Secretariat; East African Legislative Assembly – EALA; and East African Court of Justice – EACJ) plus 8 specialized Institutions whose salaries are paid only by contributions from member countries.
A few employees working in donor funded Project Implementation Units are paid with donor funds.
Per the Treaty establishing the EAC, the Secretary General is the Principal Chief Executive Officer of all Organs and Institutions of the Community.
Member States send funds to the Secretariat and the latter redistributes them to all Organs and Institutions according to the annual budget approved by the Council of Ministers and the Assembly (EALA) for each Organ and Institution.
Therefore, the Secretariat never withholds the funds EALA is supposed to receive.
For the last 8 years, the contributions of member countries to the EAC have never reached 100 percent. Where they were at 96 percent for FY2011/12, they were at 70 percent for FY2019/20.
During all these 8 years all the organs of the Community, with the exception of EALA, have tried to adapt to this situation.
“When there’s little liquidity they reduce the number of activities, missions abroad and above all ensure that employees’ salaries are paid at the end of each month,” said an accountant at EALA.
“As an example, travel expenses which were at USD 17.7 million during FY2013/14 were reduced to USD 12.05 during FY2017/18 and are lesser today.”
Since 2016 the EAC Secretariat took a series of measures to reduce costs and ensure normal operation of the Community and it seems to have worked well.
This is evidenced by international reports, including the most recent one from the African Development Bank, which rank the EAC as the most performing regional community in Africa.
As for EALA, it is a whole different story.
The 4th Assembly, which has 54 members and began in 2017, has displayed several particularities in terms of management and ethics.
Previous Assemblies held their sessions for a maximum of 14 days; the current assembly decided, contrary to the directive of the Council of Ministers, to increase this number to 21 days.
Thus, each Member of Parliament receives $560 per day (thus $ 11,760 for 21 days) and receives in addition a monthly salary of slightly over $ 6,000.
However, upon taking office, almost all Members of EALA have mortgaged 100 percent of their salary in bank loans until 2022 (end of their term of office); as the Secretariat refused to guarantee these loans because the EAC financial regulations would not have allowed it.
ChimpReports understands the MPs found a way and secured their loans including the Speaker of the Assembly, Ngoga.
The vast majority of them have even borrowed from CRDB Bank much more than their salaries.
No longer able to count on their monthly salary, Members of Parliament can only count on the daily income of $560 which they receive during parliamentary sessions, explaining why the parliamentary sessions have gone from 14 to 21 days per month.
This over-indebtedness of members of Parliament and their dependence on Parliamentary sessions for survival did not go down well with the sound financial management of EALA.
A concerned official who preferred anonymity to speak freely said “with or without money in its bank accounts, whether EAC Partner States remit their contributions or not, EALA organizes parliamentary sessions, committee meetings, visits left or right. And in the end, EALA is not able to pay its employees and members of Parliament.”
Thus, for the last two years, EALA has always had to borrow funds from the EAC General Reserve account and from other EAC institutions.
As a result, by end of July 2020, EALA owed nearly USD2 million to the EAC General Reserve Account when the two other organs, the Secretariat (by far the largest) and the EAC Court of Justice owed zero USD.
Worse still, for FY2019/20, the independent EAC Audit Commission, of which all EAC State Auditors General are members, established in December 2020 that expenditures (mainly by Members of Parliament) of more than USD 6 million had no supporting documents. EALA has so far not been able to provide the requested justifications.
A source also dismissed media reports about a conflict between the Secretariat and EALA.
“You people in the media have been writing that EALA is clashing with EAC. That’s baseless because there is no reason for it to exist. Quite simply, EALA is faced with serious management problems in a context where contributions from EAC Member States are irregular and insufficient,” said an official in the Clerk’s office at EALA.
In the meantime, Members of Parliament are threatening not to pass the remaining FY2020/21 budget (October 2020 to June 2021) if payment for their virtual meetings is not made.
An external auditor told this investigative news site that since August 2020, EALA has been working around the clock to legitimize expenses that many cannot understand.
The MPs want to borrow more than USD 1.6 million from two EAC institutions (IUCEA and LVFO) supposedly owed to Members of Parliament for virtual meetings (video conference, Zoom, etc.) they held between March and August 2020.
Thus each Member of Parliament claims USD560 per virtual meeting held even from his/her home or in some ministry based at 1 or 2 kilometers away from his/her residence.
The EAC Secretary General transmitted that request of EALA to the Council of Ministers through a letter dated 20th August, and until now member countries have not reached any consensus on this subject.