EAC cash crunch, transition top agenda in Heads of States summit

The cash crunch facing the East African Community will top the agenda of the 25th Heads of State Summit scheduled for Saturday in Arusha, Tanzania.

Leaders are expected to focus on sustainable financing of the EAC budget as they consider new funding modalities. These are based on a formula that allocates 65 per cent equal contribution and 35 per cent assessed contribution by partner states.

The discussions come as the regional bloc faces an estimated $89.5 million (Sh1.15 billion) funding gap that has nearly grounded its operations.

The budgetary challenges have also reportedly left key organs struggling to meet obligations, including delayed payments to members of the East African Legislative Assembly.

“We have not been paid for about four or five months now. The situation is serious and needs immediate action,” EALA lawmaker David Sankok said.

EALA clerk Alex Obatre has also confirmed the delays and the severity of the financial crisis. In a leaked internal memo dated February 24, 2026, Obatre warned the Assembly was facing “dire liquidity challenges”.

The clerk said the situation had made it difficult to pay February salaries and settle arrears accumulated since November 2025.

“The community is facing dire liquidity challenges to the extent that we are struggling to convene activities or pay February salaries, including the settlement of previous salary obligations,” he wrote.

In another memo dated January 27, Secretary General Veronica Nduva sought an explanation on the non-payment of salaries after complaints from KCB Bank Tanzania over unpaid loan instalments from legislators.

The delays have largely been blamed on several member states failing to remit their statutory contributions.

Only Kenya, Tanzania, Rwanda and Uganda have consistently remitted their annual contributions, while the DRC, Burundi and South Sudan have been cited among the biggest defaulters.

Recent reports show DRC owes about $27 million, Burundi $22.7 million, South Sudan $21.8 million, Somalia $10.5 million and Rwanda $5.2 million.

Against this backdrop, the Summit is expected to determine whether the eight-member bloc can secure a more stable financial footing as its ambitions in trade and infrastructure continue to expand.

The meeting will also mark a leadership transition within the community. The summit will appoint a new Secretary-General, marking the end of Nduva’s term. She took office midway to replace Amb Peter Mathuki, who denied corruption allegations that led to his exit. He is now Kenya’s envoy to Russia.

President William Ruto is expected to hand over the rotating chairmanship to the DRC, which had been expected to assume the role last year.

The summit, held under the theme “Deepening Integration for Improved Livelihoods of EAC Citizens,” will also review progress in regional programmes.

Among the initiatives to be launched is the EAC Customs Bond, a regional system designed to simplify the movement of goods by allowing traders to secure a single customs guarantee across member states.

The meeting will also see the launch of the Seventh EAC Development Strategy (2026/27–2030/31) to guide integration over the next five years.

“Convening in Arusha provides an opportunity for our leaders to take strategic decisions that strengthen cooperation, promote trade, and advance shared prosperity for the people of East Africa,” Nduva said.

The meeting will also review the status of integration of South Sudan, DRC and Somalia and make key appointments in EAC institutions, including judges to the East African Court of Justice and commissioners to the EAC Competition Authority.