Why EU is in dilemma over payment of funds for regional development

Just who should we deal with?

This seems to be the latest dilemma facing the leadership of the European Union (EU) following the findings of a new audit that partly blames a crowded field of organisations for the in-effectiveness of a special fund aimed at supporting regional economic integration in East Africa.

The EU’s funding for international co-operation with Africa has over the years mainly come through three geographically-based financing instruments including the European Development Fund (EDF) that caters for African nations under African Caribbean and Pacific (ACP) group.

Huge allocations through the EDF have particularly been channelled towards financing infrastructure projects in countries such as Kenya as a way to catalysing single and flawless market fabrics in the region.

But even as the EU moves to disburse the 10th round of the EDF, an audit on the effectiveness of the previous disbursements unveiled massive hitches that would have to be addressed if such funding is to make a mark in East Africa that has four regional integration bodies working at the same time.

“These organisations show significant overlaps in geographical coverage and membership and in mandates and policy objectives,” the European Court of Auditors says in a report titled: Effectiveness of EDF Support For Regional Economic Integration in East Africa and West Africa.

The audit points out that Comesa and EAC are primarily aiming for regional economic integration, with the EAC already having put in place a customs union and a common market while Comesa eyes to transform its current free trade area (FTA) into a fully functional customs union.

Igad on the other hand also includes regional economic integration in its mandate, but focuses more on conflict resolution and food security issues while the IOC has a mandate for economic and trade cooperation rather than for regional economic integration, and it focuses mainly on regional cooperation in natural resources management, particularly fisheries.

Nevertheless, IOC participates in the programming and implementation of the 9th and 10th EDF regional indicative programmes for the East Africa region.

This kind of overlap is causing jitters which may force the leadership of the EU to find alternative ways of managing programmes supported by the EDF in the region.

“The overlapping membership poses considerable problems , as some member countries belong to two different trade areas (Comesa and EAC). In addition, there are overlaps and incompatibilities in membership with the Southern Africa Development Community (Sadc),” the audit report states.

All the EAC countries are members of Comesa except Tanzania that maintains dealings with Sadc, a position that has in the recent times posed a headache in the region because it is not technically possible to have membership of more than one customs union.

“These overlaps in membership and mandates result in a complex institutional framework. These factors, and the current weak state of coordination between these organisations , pose serious problems for the Commission, in particular for the design and implementation of interventions in the area of regional economic integration,” the audit ruled.

According to the European Court of auditors, though the EAC integration process is making progress in terms of reaching agreements on regional objectives and policies relating to trade and transport issues such as the establishment of FTAs and customs union, it failed to work at national level.