EAC adopts new contribution formula as Ruto announces major reforms at Summit

Leaders of the East African Community (EAC) have agreed on sweeping reforms aimed at improving the financial sustainability and efficiency of the regional bloc, President William Ruto has announced.

Speaking during the Extraordinary EAC Summit in Arusha, Ruto said the heads of state had made “very consequential decisions” affecting how the community is funded and managed.

“Let me report that this morning we made in this summit some very consequential decisions,” Ruto said.

Among the key changes is a new formula for member state contributions to the EAC budget, replacing the current system where all countries contribute equally.

Ruto said the new arrangement will require member states to contribute half of the budget equally, while the remaining portion will be based on the size of their economies.

“We have taken the decision that going forward, contributions to this community will be fair and equitable,” Ruto said.

“The countries that have bigger economies and benefit more from the community should pay more, and those with smaller economies will pay equitably.”

He explained that under the new system, contributions will be split into a 50 per cent equal contribution and a 50 per cent assessed contribution, replacing the earlier proposal by the Council of Ministers of a 65 per cent equal contribution and 35 per cent assessed contribution.

The summit also agreed to ease the burden on partner states that have accumulated arrears.

“We have also taken the decision this morning that to alleviate the burden on countries that have arrears, the community will waive 50 per cent of the arrears, and the remaining 50 per cent should be paid within two years,” Ruto said.

In another reform aimed at improving decision-making within the now expanded eight-member bloc, the leaders agreed to allow decisions to be made either by consensus or by a two-thirds majority.

“The statute that established the community was formulated when we had only three countries,” Ruto said. “Now that we are eight and counting, it is increasingly difficult to get a consensus of all countries.”

He added that allowing decisions to be made by at least 65 per cent of member states will make the regional bloc “much more effective and efficient.”

The summit also resolved that salaries of members of the East African Legislative Assembly will no longer be paid by the regional bloc.

“From the next parliament, salaries of members of parliament will be paid by their respective national parliaments,” Ruto said. 

"Only allowances when they conduct EAC business will be paid by the community.”

He noted that the move will significantly reduce the financial burden on the EAC, allowing more resources to be directed toward development and integration programmes.

The leaders also agreed that countries nominating candidates for top positions in the bloc, including Secretary General, Speaker and President of the Court, must have ratified the EAC treaty and fulfilled all treaty obligations.

Ruto also announced that salaries of EAC employees, which have not been reviewed since 2006, will be reviewed starting January 2027.

As he handed over the chairmanship of the summit, Ruto thanked fellow leaders for their support during Kenya’s tenure.

Uganda's Yoweri Museveni takes over as the new chairperson of the bloc.

“I take this opportunity to register my sincere appreciation to all members of the summit for the cooperation extended to the Republic of Kenya and to me,” he said.

He also commended EAC Secretary-General Veronica Nduva for steering the organisation over the past 20 months.