The East African Community (EAC) has presented to the East African Legislative Assembly (EALA) budget estimates amounting to 110.8 million dollars (about 408 billion shillings) for the Financial Year 2026/2027. The Budget themed “Deepening Commitment and Realising Objectives and Benefits of Regional Integration,” marks the commencement of implementation of the 7th EAC Development Strategy (2026/27–2030/31) and introduces a new financing framework aimed at strengthening ownership, sustainability, and effective implementation of the regional integration agenda.
Presenting the Budget, Rebecca Kadaga, Chairperson of the Council of Ministers and Uganda’s Minister for EAC Affairs, informed the Assembly that intra-EAC trade expanded significantly by 28 percent to 19.3 billion dollars, while total trade with the rest of the world grew by 25.4 percent to 156.6 billion. Regional exports increased by 37.5 percent, contributing to a sharp reduction in the Community’s trade deficit to USD 2.6 billion in 2025 from USD 13 billion in 2024.
The Community also strengthened implementation of the Customs Union through the resolution of 35 Non-Tariff Barriers (NTBs) and the launch of the EAC Customs Bond, a regional digital guarantee scheme that facilitates movement of goods across Partner States under a single financial security.
“The East African Community remains steadfast in its pursuit of deeper regional integration, fostering sustainable economic growth, social development, regional stability, and institutional effectiveness to deliver tangible benefits and shared prosperity for all East Africans,” she noted.
The FY 2026/2027 Budget will focus on seven strategic priority areas aligned to the 7th EAC Development Strategy: promotion of regional trade and value chains, industrialisation and value addition, social integration, implementation of the East African Monetary Union roadmap, infrastructure development, peace and security, and institutional strengthening.
Promoting inter and intra-regional trade through consolidated value chains and legal reforms was allocated 11.1 million dollars, while 7.2 million went to boosting production, productivity, and regional industrial development through value addition in key productive sectors to stimulate economic diversification.
Building institutional capacity to improve compliance, coordination, and visibility for increased service delivery and accountability across the Community got the bulk, 70.5 million dollars, while strengthening social integration through improved access to quality social services and enhanced social cohesion got 10.7 million dollars.
Other areas include advancing the harmonisation of fiscal and monetary policies, operationalisation of the East African Monetary Institute and an integrated financial system toward the implementation of EAMU Roadmap, allocated 4.1 million dollars; improving regional infrastructure to boost trade integration, mobility, and competitiveness and 4 million and promoting regional governance, political commitment, accountability, and inclusivity for sustained peace, security, and enhanced defence integration within the EAC, which had been allocated 3.4 million dollars.
The Budget estimates will be considered and debated by the East African Legislative Assembly before approval. The proposals have raised varying concerns, especially regarding cross-border trade barriers, impediments to domestic revenue mobilisation drives in the regional, as well as rising debt, among others.
Mwambutsya Ndebesa, a Member, SEATINI Board of Trustees, says the higher the locally raised revenues, the more the meaning of sovereignty. Strong domestic resource mobilisation is essential for safeguarding national and regional sovereignty, as excessive reliance on external financing can undermine a country’s ability to independently determine its development priorities, he says.
He, however, warned that as governments seek to increase their domestic revenue mobilisation levels, their policies must ensure equality in the tax administration, adding that it is necessary that governments use tax as a tool for social justice, sovereignty, and pay attention to the question of efficiency, effectiveness, and equality in resource mobilisation.
Speaking at the sixth edition of the EAC Post-Budget Dialogue, he said that current tax systems in Uganda and the region are largely regressive, placing greater emphasis on taxing consumption rather than income, which disproportionately burdens lower-income populations and undermines the goal of taxation as a tool for social justice. The dialogue is an annual event organized by the Tax Justice Network Uganda, led by SEATINI Uganda, a regional NGO focused on improving trade and tax rights.
Magode Ikuya, State Minister for EAC Affairs, says as the EAC draws its budgets and as the regional parliament debates them, they should have in mind that the budgets target deepening integration for the good of the people of the region. Ikuya, however, showed concern over the continued small resource envelope, despite the increasing membership, now at eight.
“Despite the expansion of EAC membership to eight Partner States, delayed or insufficient financial contributions by some member countries continue to place pressure on the smooth functioning and sustainability of Community programmes and institutions,” he says. The EAC has made amendments to the contributory policy, with 50 percent of the total split equally among all member states to reflect equal membership status, while the other half is assessed according to each country’s economic strength, measured by the nominal GDP per capita over the previous five years.
Under the member states are legally obligated to disburse their annual financial commitments before December of each fiscal year, and under the 2026/2027 fiscal framework, the total expected state contribution is 62.77 million dollars. For the year just ending, overall compliance stood at roughly 36.6 percent, while outstanding obligations reached a high of almost 90 million dollars.
The minister’s concern was more on the failure of some countries to meet their financial obligations to the EAC, saying that this makes the few compliant contributors should other people’s responsibilities, including paying for the remuneration of the representatives in the regional parliament. This is one of the reasons why the decision has now been made that that the EALA Representatives will be paid by their respective countries.
On his part, Herbert Kafeero, Deputy Executive Director, SEATINI Uganda, says EAC Partner States must prioritise widening the tax base, strengthening tax administration, combating tax evasion and illicit financial flows, and supporting small and medium enterprises to formalise and grow as drivers of employment and domestic revenue mobilisation.
This, will not only enable the governments enhance their levels of supporting their own budgets, but of the EAC too, through empowering private sector to pay more taxes.
Fiscal constraints persist across EAC Partner States, with tax-to-GDP ratios remaining low at between 11 and 15 percent, with Uganda ranking below Kenya and Rwanda at around 14 percent tax-to-GDP ratio. Basundhara Furlong Tripath, Deputy Head of Cooperation at the Embassy of the Republic of Ireland stressed the importance of Domestic Resource Mobilization in reducing governments’ reliance on foreign aid and debt.
The Government of Ireland in regard to taxation notes that effective taxation provides a reliable source of revenue and are a crucial building block for increasing DRM, she says. Sharing the successes of taxation vis-à-vis taxation, Tripath cautioned the governments against blanket tax policies, giving the example of how low corporation tax rates have led to the quick progress of the country.
At the local level, there were concerns about the failure in regional systems to block tax leakages, especially through smuggling within countries, which affects DRM efforts, which URA blamed on the highly porous borders but also the differences in national tax policies that encourage smuggling-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
