Poor accounting hurts East African–EU talks

A lack of transparency has been blamed for lose of funding by a regional economic bloc to facilitate key trade talks with Europe.

A report seen by the Daily Nation reveals that the Swedish International Development Agency (Sida) has declined to renew funding for the Economic Partnership Agreement (EPA) talks between the East African Community (EAC) and the European Union (EU).

The report, submitted to the sectoral council on trade, industry, finance and investment earlier this month, indicates that EAC partner states had asked Sweden to renew the funding programme following its expiry last year. The request was, however, declined.

Sida, the report reads in part, “did not agree to its request to extend the project beyond December 31, 2012 citing inadequate accountability as the main reason.”

In particular, Uganda and Rwanda had failed to submit financial reports on the usage of the Sida funds as of June this year.

They were also yet to remit balance of funds under the scheme to the EAC secretariat.

“Each country received its own share of the moneys. A few countries have not properly accounted for their use of the money. Kenya is not one of them,” Ministry of East African affairs, commerce and tourism economist, Dr Richard Sindiga said.

The EAC received Sh292.32 million ($3.48 million) in 2011 from Sida to facilitated stalled EPA negotiations with Europe.

Although Mr Sindiga said the Community had the funds to continue negotiations with Europe, this new development comes at a time when the region is under criticism for increasing dependence on donor funding for its activities.

Currently, EAC is negotiating a new trade deal with the United States.