Address by Secretary General, Amb. Liberat Mfumukeko, during the Press Conference on 10th October 2016, at the EAC Headquarters
Distinguished Members of the Media;
My Colleagues from the East African Community;
Ladies and Gentlemen.
Good Morning
I warmly welcome you to this Press Conference and to the EAC Headquarters. This is your home and this Media Centre was set up purposely to assist you in your work. I highly commend the Journalists in our region for the wonderful job they have done so far in articulating the EAC Regional Integration Issues to the people of East Africa and beyond. In doing so, I wish to affirm to you that the EAC Secretariat through the Corporate Communication Department will continue facilitating you with information and knowledge on regional integration whenever you are writing a story on it.
As you are aware, I took over EAC Leadership from my predecessor Amb. Dr. Richard Sezibera in April this year. I will steer EAC for the next five years. During my tenure I commit to engage with you frequently pertinent issues about the Community. I firmly believe that the media has a big role to play in this integration journey. As the media, you have a mammoth task of educating the East Africans the benefits of integrating and also updating and sensitizing them on the achievements made so far.
A. KEY ACHIEVEMENTS
Members of the Media
Ladies and Gentlemen
In April this year EAC attained international recognition as the fastest growing Regional Economic Bloc in Africa as was reported by the Guardian Newspaper. This acclaim is as a result of the major accomplishment EAC has attained in the recent past. EAC also emerged as the most integrating Regional Economic Community (REC) in the Continent according to the recent Africa Regional Integration Index Report 2016, jointly carried out by African Union Commission (AUC), African Development Bank (AfDB) and the United Nations Commission for Africa (UNECA).
According to the study, which covered eight recognized Regional Economic Communities (RECs) in Africa, EAC emerged the overall top performing REC on Regional Integration.
EAC has registered great strides in the key pillars of integration and let me just highlight a few achievements:
1. As a result of lot of work done by colleagues in the customs directorate, EAC is now implementing a single customs territory, which means goods are cleared only once at the entry point. This has resulted in the drastic reduction of the period taken to clear and transport goods. It used to take 20 days to clear and transport goods from Mombasa to Kampala, it now takes four days to transport goods to Kampala and about six days from Mombasa to Kigali. This has greatly reduced the cost of doing business by bringing down the transport costs.
Am happy to inform you also that out of the out of the 15 borders earmarked to operate as One Stop Border Posts, 11 have now been completed and 10 of these are already operational. One stop border posts will reduce the amount of time spent at the boarder points.
2. As you are all aware, we are now in a common market where there is free movement of people, goods and capital. Laws have already been enacted in our partner states to ensure that the citizens enjoy the freedoms, move freely, and trade freely. Members of the media, I hope you are aware that in three out of the five countries in EAC, their respective citizens can enter and exit their territories using their IDs. I am sure that shortly this will be the norm in all the countries after the process of ensuring this is complete. I also wish to inform you that come 2017, the International East African Electronic passport will be in use.
3. In terms of free movement of labour, some EAC Countries are now issuing work permits free of charge and also some professionals can practice in the region without requirement of further accreditation because their qualifications are mutually recognized, this include Engineers; Architects; Accountants; and Veterinary Officers. Process is underway for Lawyers.
4. Ladies and Gentlemen, you all know that EAC has been working on a process of laying the foundation for establishment of a monetary union. The dream is to have east Africans trade easily using any of their currencies and eventually have an East African common currency. Towards this we have started the process of starting four key institutions to support the monetary union as provided for in the Protocol, namely; EAC Monetary Institute; EAC Statistics Bureau; EAC Financial Services Commission; and EAC Surveillance, Compliance and Enforcement Commission; is underway.This is because establishment of a strong Monetary Union will require a robust institutional framework to ensure compliance and safeguard the convergence process.
5. I wish to remind you that EAC is the only block in the continent that has a dream of walking the whole journey of integration. Our ultimate dream is to be in a political federation which is the most unique feature of our integration process. To prepare ground for this EAC continues to promote good governance across the region. This is evidenced by the successful Election Observer Missions in the Republic of Burundi; the United Republic of Tanzania; and the Republic of Uganda. We have also established an EAC Panel of Eminent Persons to support internal capacity for preventive diplomacy to support internal capacity for preventive diplomacy, with the intention of promoting local solutions to local problems.
6. Dear Friends, there can never be a successful integration unless the countries are connected. We have implemented programs aimed at connecting the region and mainly in infrastructure and Energy. In this area we have engaged and completed specific projects e.g.:
a) The completion of the construction of the Arusha-Namanga- Athi River Road linking Kenya and Tanzania.
b) Commencement of the construction of sections of the Arusha – Holili/Taveta-Voi road (240 km) this year. This is the 2nd multinational road coordinated by the Community.
c) Enactment of the EAC Vehicle Load Control Act, 2016 and the EAC One Stop Border Posts Act, 2016 to reduce the destruction of roads and by overloaded vehicles and ease the movement of persons and goods across the EAC borders respectively. This will result in savings above USD 1.5 Billion for the Partner States.
d) Construction of the Standard Gauge Railway (SGR) from Mombasa to Nairobi (472 kms) is at an advanced stage and progress is approximated at 70% as at March 2016; Completion expected June 2017.
e) In addition to this, EAC now boasts of a liberalized air transport services. Each major city pairs in the region is serviced by more than 4 flights every day.
Key Achievements under the Energy Sector in EAC:
Under the Energy Sector, a lot of achievements have been registered and the main one being development of the Power Master Plan which will be a Blue print for generation and transmission expansion in the region for the next 25 years. As a result installed capacity increase from 2691 MW (2008) to 4125 MW (current) and interconnectivity of power network has been increased.
Secondly, there are cross border electricity connections that have already been realized in the borders of Namanga, LungaLunga and Kikagati-Murongo is under implementation.
A number of projects have been planned and feasibility studies already launched for:
a. Natural Gas Pipeline from Dar es Salaam to Tanga and Mombasa – completed 2011
b. Scoping for Renewable Energy Resources in the EAC Region – completed 2013
c. Technical Capacity for Small Hydropower Development – completed 2013
d. Five Year Implementation Action Plan for the EAC Strategy on Scaling Up – completed 2014
e. Oil Products Pipeline from Kigali to Bujumbura – under procurement
f. Oil Products Pipeline from Mbarara-Mwanza-Isaka-Dar es Salaam – under procurement
I also wish to inform you that in June this year, we launched the East Africa Centre for Renewable Energy and Energy Efficiency which is domiciled in Uganda.
I could go on and on listing the achievements. This serves to demonstrate to you that the notion that there is nothing that happens in Arusha is wrong, there is also an impression that EAC is about travelling and earning allowances, again this is far from the truth. Alot is happening, of course there is travelling but for work which is very regulated and monitored now. I also need to say that our court is now very busy with most East Africans seeking justice from this court on various matters while our Assembly has been very active playing an oversight role for the East Africans.
B. PRIORITY AREAS FOR THE NEXT 5 YEARS
Members of the Media,
Ladies and Gentlemen
As the new Secretary General, I would like to take this opportunity to share with you my Vision and priorities for the Community in the next 5 years. For my tenure in office I will focus on fewer priorities that will deliver quick results. I want to focus on areas that will touch on the lives of East Africans and address the basic needs such as food, health, education and improved incomes. I will therefore ensure that a big percentage of the EAC resources are directed to sectors such as Agriculture, Health, Education, and Employment creation. To achieve this I will strive to establish strategic partnerships with the development partners, the private sector and also the civil society organisations and of course the members of the fourth Estate. In line with this we have listed a few priorities as follows:-
i) Consolidation of the Single Customs Territory (SCT) to cover all imports and intra-EAC traded goods including agricultural and other widely consumed products
ii) Further liberalization of free movement of skilled labour across the Partner States
iii) Enhancement of regional industrial development through investment in key priority sectors, skills development, technological advancement and innovation to stimulate economic development
iv) Improvement of agricultural productivity, value addition and facilitation of movement of agricultural goods to enhance food security in the region; and
v) Promotion of regional peace, security and good governance.
Under the above priorities, activities would be identified annually that will have very clear targets and results.
C. PROGRESS MADE SINCE ASSUMING THE OFFICE OF THE SECRETARY GENERAL
Members of the Media,
Ladies and Gentlemen
a) Instituting Cost Reduction Reforms in the EAC Organs and Institutions
Since taking over the office in May this year, I instituted several reforms in the EAC Organs and Institutions aimed at cost reduction in the EAC projects and programmes. The reforms target savings to the tune of US$ 6 million in the Financial Year 2016/2017 alone.
The implementation of these reforms are going on very well and already some positive results are being received, for example, for the first three months of implementation (May to August 2016), the first estimates point to savings of US $588,768 in travel expenditures alone. We shall calculate again for the months September to October. The reforms focus on cutting any wastage, containing and reducing travel where all EAC Staff must spend 50 percent of their time in Arusha and also hold 25% of the meetings via video conference facility. We have also reduced the number of days for our meetings to a maximum of four. Dear friends it is no longer business as usual.
b) EAC passed the rigorous EU Fiduciary Risk Assessment
The European Union, through a consultancy firm, Moore Stephens LLP based in London, undertook a Fiduciary Risk Assessment (FRA) on the EAC Secretariat’s operations in 5 Pillars, namely, Internal Control System; Accounting Systems; Independent External Audit; Procurement; and Sub-Delegation. The firm checked on our procedures and processes on the mentioned pillars.
According to the findings, the EAC Secretariat has met the internationally acceptable standards and successfully undergone the assessment as required by the European Union. The conclusion was that EAC applies appropriate rules and procedures in all material aspects for providing financing from European Union funds through procurement and in accordance with the criteria set by the European Commission. This milestone shall now enable the EAC Secretariat to directly access funding from the European Union through contribution agreement i.e. EAC will be allowed to use its own procedures during implementation. It is important to note that EAC has gone through the same assessment twice in the past without success in 2006, and also in 2008. Passing of the assessment in 2016 June is a great testimony that our procedures and systems have greatly improved and now development partners have confidence in our systems and processes. A similar assessment was conducted by USAID with similar results.
c) Project Coordination Mechanism Launched
EAC has more than 45 different projects and sub sectors that we are involved in (from road construction, energy, culture, citizen sensitization, immigration etc.)
To eliminate duplication, poor reporting and enhance coordination with development partners who contribute more than 50% of the EAC budget we established the Project coordination unit to enhance how funds are managed and other funding from Development Partners.
A multi – disciplinary team has been appointed initially to serve on an interim basis as the EAC Projects Coordination Unit. This Unit is now functional and monitoring all EAC donor funded projects and has already created a database for all these projects and can produce a single report for all projects.
The Unit serves as a one-stop desk for information on EAC projects both internally and externally and we are working on full time staffing modalities to be considered in the near future.
d) Strengthening Relations with Bilateral and Development Partners
In order to unlock the potential bilateral partner resources that can be availed to the EAC, the SG has held high level diplomatic missions in East Africa and Abroad.
One of these high level missions include negotiation with the EU in Brussels and where the future cooperation between EAC and EU was discussed and a grant totaling Euro 85 Million was committed to our work.
These funds will support the following key priorities i.e. Peace and Security, Regional Integration, Natural Resources, Institutional Strengthening and Partner States will access Euro 40 Million for Trade facilitation.
The EAC SG has also held strategic discussions with all Development Partners contributing to the EAC Partnership Fund, USAID, Trade Mark East Africa (TMEA), KfW, Aga Khan Foundation and United Nations, with the aim of cementing the relationship between EAC and the Development/bilateral Partners.
Further bilateral discussions have been held with Ambassadors from Germany, USA, Belgium, France, Brazil and Ireland.
During all these high level discussions, the Development Partners reaffirmed their strong commitment to supporting EAC, financial and technically to achieve its overarching mandate and ambition.
e) Implementation of Quality Management System
The Secretariat has continued to rollout Quality Management System based on ISO 9001:2008. I am happy to report now that EAC is ISO certified.. this is also confirmation that our processes meet the international recognised standards.
f) Joining of the Republic of South Sudan
In terms of geographical growth, EAC has now reached a mark of serving a population of over 160 million people with the joining of South Sudan who is now a full member of East African Community having deposited the instruments for ratification with the Secretary General in September this year. This means that South Sudan will now be integrated into the activities, programmes and projects of EAC and will commence contributing to the EAC budget.
D. FACTS ABOUT EAC COMMUNITY FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR 2014/2015
Members of the Media,
Ladies and Gentlemen
I would like to take this opportunity to inform you that the East African Community Financial Statements for the Financial Year 2014/2015 were audited by the EAC Audit Commission made up of the Auditors General of the EAC Partner States. An unqualified (clean) audit opinion was issued, meaning that the Financial Statements presented fairly, in all material respects, the financial position, performance and cash flows in accordance with the accounting reporting framework used (International Public Sector Accounting Standards) and comply with the provisions of the Treaty for Establishment of the East African Community. The report was tabled to the East African Legislative Assembly for debate at the First Meeting of the Fifth Session of the Third Assembly that was held from Monday, August 22nd 2016 to Friday, September 2nd 2016, in Arusha, Tanzania.
As is the practice in the audit processes, the Audit Commission issued to the EAC Secretary General a Management Letter highlighting areas that require improvement, without alluding to fraud. The management of the Community appreciated the recommendations of the Audit Commission and the East African Legislative Assembly on the Accounts and is implementing them.
While the EAC appreciates the role of the Media and welcomes interaction with many journalists, the Management was taken aback by some of the commentaries and headlines that seemed to sensationalize clearly out of context certain aspects of the Accounts.
The Citizen newspaper, dated 4th September, 2016, led with a top headline ("Revealed: Billions swindled at EAC”). The Management of the Community wishes to clarify that the thrust of the Article gave the wrong impression to the readers of a clandestine and wilful pilferage of the Community finances. Clearly, the main issues even reading from the Article were of an administrative nature, and their cost implications unavoidable as matters of overtime payment for eligible categories of staff, compensation for untaken leave at separation with the employer are employees' non-negotiable legal entitlements. The payment for goods and services delivered/provided to the Community again are liabilities that must be settled.
I wish to reiterate that a number of issues were raised which have to be addressed by the management, some of the issues concern procurement and travel where reforms have already been instituted to address them. I wish to state categorically that there were no billions lost, actually there is no evidence of any money lost. We are committed to improve our practices to ensure that we are within the rules and ensure efficiency and cutting costs. Already we have changed a lot on the way we are doing our business now.
One of the areas where we are committed to ensure 100% compliance is in the procurement of goods and services. I know you are aware of some issues in the procurement of EAC insurances and others. I wish to clarify that the process was stopped to ensure compliance in our internal processes. There are many procurements that were put on hold to ensure that all provisions of the procurement manual are complied to. I can confirm that now this is going on very well and I want to assure you that the audits of especially 16/17 will be very impressive. Some of the issues that were raised by the audit of 14/15 had been raised in the previous years and a time had to come to put a stop on some things.
Implementation of reforms is not smooth, its painful, not always acceptable to every one but its time to face reality or perish, act or be acted on.
E. CONCLUSION
In conclusion, I want to exude the confidence that I have and assure you that EAC will achieve its mandate as per the treaty, there is strong resolve and willingness to improve in the way we do business, once again I pledge to work with you, the Media, in order to intensify our reach out to the people of East Africa and to deepen our relations and also to practice the Open Door Policy with you.
I thank you for your kind attention. I have another commitment shortly after this Press Conference, and therefore, I invite a few questions, in case you have any.
Thank you and GOD bless you all, God bless EAC!
EAC Secretariat,
Arusha, Tanzania.
10th October 2016