Leaders of the East African Community have approved a new financing formula aimed at easing budget pressures within the organisation, after years of delayed contributions from member states strained the bloc’s operations.
The reform was adopted during the 25th Summit of EAC Heads of State and will come into effect on July 1, 2026, according to officials.
Under the new mechanism, financial contributions from member states will be split into two components. Half of the budget will be funded through equal contributions shared uniformly among member countries, while the remaining half will be based on each country’s economic capacity.
Officials say the revised formula is designed to strike a balance between fairness and the varying economic strengths of member states, while ensuring a more predictable funding base for the organisation.
The reform follows years of financial tensions within the regional bloc, which has struggled to secure timely payments from its eight member states.
For the 2025–2026 financial year, the organisation requires more than $89 million to finance its institutions and programmes aimed at strengthening regional integration across East Africa.
However, only Kenya and Tanzania have fully paid their annual contributions so far, each amounting to around $7 million.
Delays from other countries reflect a mix of fiscal pressures and competing national priorities, including security challenges in Democratic Republic of the Congo and large infrastructure financing needs across several member states.
More Read
Outstanding arrears remain significant across the bloc.
The Democratic Republic of the Congo, which joined the EAC in 2022, owes approximately US$27 million to the organisation, making it the member with the largest unpaid balance.
By contrast, Uganda has the smallest arrears, estimated at around US$1.1 million.
The funding gap has already disrupted the functioning of several EAC institutions.
Officials say staff salaries have been delayed, regional meetings postponed and development projects slowed due to the shortage of funds.
Legislative activities were also affected. The East African Legislative Assembly was forced to suspend operations during the first half of 2025 because of financial constraints.
More Read
Regional leaders say addressing the funding challenges is essential to maintaining the momentum of East Africa’s integration agenda.
“Regional integration is no longer a choice, but a necessity for forging regional value chains that are resilient to global shocks,” said Beatrice Askul Moe, who chairs the bloc’s Council of Ministers.
She added that the success of the regional bloc depends on deeper economic integration among member states and stronger cooperation across the region.
The EAC has been working to expand trade, infrastructure connectivity and industrial development among its members as part of a long-term plan to create a more integrated regional economy.
Alongside the new funding formula, the summit also approved a one-time waiver on outstanding arrears owed by member states.
Under the decision, countries will receive a 50 percent reduction on their unpaid contributions to help ease financial pressures.
However, member states benefiting from the waiver will be required to settle the remaining half of their arrears within two years.
Officials say the measure is intended to reset the bloc’s finances while recognising the economic challenges faced by some countries.
Analysts say the reforms could help stabilise the organisation’s funding structure and reduce tensions among members over financial obligations.
Still, they note that the long-term success of the new formula will depend on whether member states comply with their revised contribution commitments once the system takes effect in mid-2026.
