Home BusinessBanking East Africa: EAC Pushes to Align Regional Bank With Bloc’s Structure

East Africa: EAC Pushes to Align Regional Bank With Bloc’s Structure

by
Namibia: Peugeot Will Export 'Once Issues Are Resolved'

The East African Development Bank (EADB) could soon be answerable to the East Africa Community (EAC) if a report on the bank’s governance and structure is passed.

The report, to be submitted to the EAC’s Council of Ministers on February 27, was commissioned by the EAC Heads of State in 2016. They also directed the council “to review the EADB Charter to streamline it into the EAC main structure.”

The review team was tasked with finding ways to streamline the EADB into the EAC main structure in a meeting in Kampala in September 2019. The group was made up of experts from finance ministries, attorney-generals’ chambers, central banks, the EADB itself and ministries responsible for EAC Affairs.

Among the recommendations is for the Council of Ministers to develop a collaborative framework between the EADB and the Community to align the bank’s priorities with those of the Community.

EADB, which was retained following the collapse of the first EAC in 1977, has been the subject of a tussle between the EAC Secretariat which wants to control it and the bank’s board of directors, who want it to remain a semi-autonomous institution.

The bank provides loans to projects directly, through syndicates and other forms of co-financing. While the EAC Treaty recognises EADB as one of the institutions of the Community, the current EADB Treaty and Charter do not explicitly recognise the existence of the Community.

Unlike other institutions of the Community, EADB, whose headquarters is in Kampala, is an independent financial institution that operates purely on business terms and has other shareholders who are non-EAC members.