South Sudan may be suspended from EAC over $27 million debt

Since joining the East African Community (EAC) in 2016, South Sudan has developed into the bloc’s largest debtor and now faces the risk of having its membership suspended accordingly.

All member countries in the regional bloc are required to pay $8 million as contributions annually. Since becoming a member, South Sudan has remitted $3 million only and as of September 13, the country owed $27 million – this year’s financial obligations plus arrears.

Juba has until the end of October to settle its dues or the EAC leaders will consider invoking Article 143 or 146 to impose sanctions at a summit next month.

“If South Sudan fails to pay its financial commitments by the end of this month when the heads of state meet in November, they may decide to impose sanctions on us,” said^[1] Kim Gai Ruot, a South Sudanese representative to the East African Legislative Assembly (EALA).

Article 143 of the treaty says a partner state, which defaults in meeting its financial and other obligations, shall be subject to sanctions which the Council of Ministers will recommend to the summit.

Whereas, Article 146 states that the summit may suspend a partner state from taking part in activities of the bloc if it fails to fulfil fundamental principles and objectives of the treaty, including the failure to meet financial commitments to the community within a period of 18 months.

The implication of the above is that a suspended partner state will cease to enjoy benefits provided for under the treaty but Article 146(2) adds that the country will continue to be bound by membership obligations until the suspension is lifted.

The Juba suspension issue comes at a time when the EAC is facing a financial crisis^[2] due to the failure of some partner states to remit their share of contributions. Apart from South Sudan, the biggest defaulter, Burundi owes $13 million, Tanzania $9 million, Kenya $8 million, Rwanda $7 million and Uganda $2 million.

While some regional lawmakers are calling for a suspension of the membership of the sixth and newest partner state, others sympathize with South Sudan on grounds that it was still going through political and security setbacks.

If sanctions are imposed on Juba, they will significantly affect the country still working to regain some stability^[3] after years of conflict. “Sanctions, if imposed, will affect the market in South Sudan and our students who are currently studying in East African countries,” Kim added.

Meanwhile, the country’s Minister for Trade, Industry and East African Community Affairs, Paul Mayom has requested the regional bloc to give more time to remit its dues instead of suspending it, citing the financing problems the young nation is having.

“The government of South Sudan has always put plans in place to meet its EAC obligations but all these need time to deliver. We have problems with funding though the matter is now with the Ministry of Finance. Therefore, other EAC members and the Assembly should be patient with us,” Mayom said last week.

A final resolution for sanctions against South Sudan will be passed by the EAC Heads of State at a summit scheduled to hold in November, the bloc’s Council of Ministers said.

The Council is also expected to deliberate on delayed contributions from all other partner states while the prospect of an increased EAC budget^[4] is also a possibility. This is to enable the bloc to cope with rising wage expenditure, its expanding scope and the increasing number of institutions.

References

1. ^{^} said (radiotamazuj.org)
2. ^{^} financial crisis (www.theeastafrican.co.ke)
3. ^{^} regain some stability (venturesafrica.com)
4. ^{^} increased EAC budget (www.theeastafrican.co.ke)