COM/ADM/ADC/VII/7 Distr. RESTRICTED COM/ADM/ADC/VII/7 May 1999 Original: ENGLISH COMMON MARKET FOR EASTERN AND SOUTHERN AFRICA Seventh Meeting of the Committee on Administrative and Budgetary Matters Nairobi, Kenya 13-15 May, 1997 REPORT OF THE COMMITTEE ON ADMINISTRATIVE AND BUDGETARY MATTERS 99--/pmc-jcc A. INTRODUCTION COM/ADM/ADC/VII/7 Page 2 1. The Seventh Meeting of the Committee on Administrative and Budgetary Matters of the Common Market for Eastern and Southern Africa (COMESA) was held in Nairobi, Kenya from 13 – 15 May, 1999. B. ATTENDANCE, OPENING OF THE MEETING, ADOPTION OF THE AGENDA AND ORGANISATION OF WORK Attendance 2. The Meeting was attended by delegates from Burundi, Democratic Republic of Congo, Eritrea, Ethiopia, Egypt, Kenya, Mauritius, Namibia, Rwanda, Sudan, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe. The list of participants is at Annex VII. Opening of the Meeting (Agenda item 1) 3. The Meeting was opened by Hon. Joseph Kamotho, Minister for Trade of the Republic of Kenya. Honourable Nicholas Biwott, Minister for East Africa and Regional Cooperation of the Republic of Kenya also attended the opening ceremony. On behalf of His Excellency, Daniel T. Arap Moi, President of the Republic of Kenya, Honourable Kamotho welcomed all delegates to the meeting. He noted that the Committee on Administrative and Budgetary Matters being the first of the Policy Organs Meetings, had an important input in the development of Policy. 4. Honourable Kamotho noted that, while member States currently provided all the funding for the Secretariat, it was necessary for the Committee to evolve other innovative ways of resource mobilisation including private sector contribution. 5. Honourable Kamotho expressed his happiness with the fact that financial contributions from member States to the COMESA Secretariat had continued to improve over the past two years. He said this reflected the commitment of member States to the objectives of COMESA. He concluded by urging member States to continue to build a sound foundation so that COMESA may realise its objectives. 6. In his statement, Mr. Mwencha welcomed the delegates and stressed the importance of the Committee in the structure of COMESA. He thanked the Government of the Republic of Kenya for hosting the current Policy Organs Meetings and for the support it always extends to the COMESA Secretariat the COMESA member States for their commitment to regional integration, and the COMESA High Commissioners/Ambassadors for their role in supporting the work of the Organisation. Vote of Thanks COM/ADM/ADC/VII/7 Page 3 7. A vote of thanks was also moved by the delegate of Eritrea. In his vote of thanks the delegate on behalf of the other delegates and on his own behalf extended their gratitude to the Honourable Minister for opening the meeting. He also requested the Minister to extend their gratitude to President Arap Moi, the Government and people of Kenya for the warm hospitality extended to them. Adoption of the Agenda and Organisation of Work (Agenda Item 2) 8. The Meeting adopted the following Agenda: (1) Opening of the Meeting. (2) Adoption of the Agenda and Organisation of Work (3) Report on Restructuring and Re-organization of the Secretariat (4) Staff Recruitment (5) Brief on COMESA Headquarters (6) 1999 Budget Performance (7) 1999 Budget Performance for the COMESA Court of Justice (8) Implementation of 1999 Work Programme (9) Any Other Business (10) Adoption of the Report and Closure of the Meeting 9. The meeting elected the following Bureau for the next 2 years: Chairman - Kenya Vice-Chairman - Mauritius Rapporteur - Zambia 10. The Meeting adopted the following working hours. Morning - 08.15 - 13.00 hours Afternoon - 15.00 - 17.30 hours C. ACCOUNT OF PROCEEDINGS COM/ADM/ADC/VII/7 Page 4 Report on the Restructuring and Reorganisation of the Secretariat (Agenda item 3) 11. The Committee recalled that the exercise to restructure and reorganise the Secretariat initially arose from Article 187(2) of the COMESA Treaty and had the objective of ensuring that the Secretariat was more suitably structured to efficiently and adequately discharge the responsibilities entrusted upon it. 12. The Committee further recalled that a team of management consultants had been appointed in June, 1997 to carry out the First Phase of the Restructuring and Reorganisation of the Secretariat. 13. The team had proposed a new structure of the COMESA Secretariat that was approved by the Fourth Meeting of the Council of Ministers in November 1997. The new structure departed from a hitherto sectoral to a programme oriented structure. The Structure provided for core staff that would be backed up by consultants when specialised expertise was required 14. The recruitment for the First Phase that took place during 1998 covered the top management of COMESA i.e. the Executive Management and Directors and other senior officials except for the posts of Director, Investment Programming and Private Sector Development; Director, Information Networking and for post of Public Relations Officer. 15. The recruitment for the following posts was therefore, scheduled by Council to take place in 1999: (a) Director, Investment Programming and Private Sector Development; (b) Senior Programme Analyst (Monetary) (c) Senior Programme Analyst (Infrastructure Development); (d) Public Relations Officer; (e) Information Systems Analyst; and (f) Trainee ADP Expert (ASYCUDA) 16. The Committee noted that the Second Phase of the Restructuring and Reorganisation exercise covered the following areas: (a) Proposed job descriptions, evaluations and classifications; COM/ADM/ADC/VII/7 Page 5 (b) Creation of additional Professional and General Service posts and redeployment of posts; (c) The new Staff Rules and Regulations; and (d) The proposed system for staff performance appraisal. 17. The Committee was informed that the exercise had been undertaken by a team of consultants from the Economic Commission of Africa who had submitted their Report, Document No. COMESA/ADM/ADC/VII/2. In carrying out their work, the consultants had taken into account the approved structure of COMESA as well as the 1999 manning plans of the Secretariat. They made the following recommendations: (a) The functions of Human Resources Management and that of General Services be separated by creating two separate posts namely that of Chief, Human Resources Management (P4); and that of Head, General Service (P3). (b) A post of Information Systems Analyst for Local Area Network (LAN) (P3) be established and filled in 1999 by redeployment of posts from other divisions of the Secretariat as it would be cost-effective to recruit a regular staff than using consultants. (c) The current post of Associate Librarian (P2) be considered for future reclassification at the P-3 level given the increasing importance of electronic networking and connectivity facilities that the holder of the post have to perform. (d) The following posts in the Information and Networking Division be relocated: Associate Statistician to Research and Strategic Planning. Associate ADP officers (ASYCUDA) to Trade, Customs, and Monetary Affairs Division; and Associate ADP Officer (EUROTRACE) to Trade, Customs and Monetary Affairs Division. (e) The Division of Trade, Customs and Monetary Harmonization be retitled “Trade, Customs and Monetary Affairs”. COM/ADM/ADC/VII/7 Page 6 (f) The Division of Private Sector Development and Investment Programming be retitled “Private Sector Development and Investment Promotion”. (g) The title Programme Analyst be abolished and the functional titles reflecting the contents of job descriptions be instead introduced. (h) A General Service level post be created at GS 9 in the Technical Co- operation and Resource Mobilization Unit. 18. In the discussions that followed, the Committee noted that the Reorganisation and Restructuring exercise though already approved had not given Agriculture and Industry prominence. One delegation suggested that the new structure had not got a correct relationship in post allocation between Directors; Senior Experts and Experts. 19. The Committee set up a Sub-Committee comprising of the following member States: Burundi, Egypt, Kenya (elected to chair) Mauritius, Swaziland and Zimbabwe with the Secretariat as Rapporteur. The Sub-Committee was mandated to examine some aspects of the Report on Restructuring and Re- organization of the Secretariat prepared by ECA consultants. In particular, the Sub-Committee was asked to examine the job descriptions and gradings with a view to determining whether the consultants fulfilled their mandate. 20. The Committee noted that the Sub-Committee recalled that the Council of Ministers had in April 1997 recommended to the Second Summit of the Authority that the Secretariat be restructured in order for it to become more efficient and in order to deliver the services required of it, taking into account changes that were taking place at national and global levels. The Sub-Committee further recalled that pursuant to this decision, an independent consultant was commissioned to review the existing structure. 21. Following the review carried out by the said consultant, Council considered the structure proposed by the Consultant, in November 1997,and approved it. The Committee further noted that it was on the basis of the approved structure that Council and the Authority, during June, 1998 Policy Organs Meetings in Kinshasa, D.R. Congo, filled the following posts whose job descriptions had already been prepared. Secretary General; Assistant Secretary General; Director of Administration and Finance; Director of Trade, Customs and Monetary Affairs; Director of Infrastructure Development; Director of Legal and Corporate Affairs; Chief, Strategic Planning and Research; and COM/ADM/ADC/VII/7 Page 7 Chief Internal Auditor. 22. The Committee also noted that during the June 1998 Policy Organs Meetings, Council directed the Secretary General to complete the restructuring process, for the remaining approved posts. Subsequently, in December 1998, Council considered and approved the manning levels and grading of the approved posts. It was, therefore, on the basis of the approved manning levels and gradings that the job descriptions, contained in Document COMESA/ADM/ADC/VII/2, were presented. 23. The Committee noted that in the structure the professional posts were graded as follows: Six (P5) posts, 11 (P4) posts; 10 (P3) posts, 8 (P2) posts and 1 (P1) post. This gives a spread of 17 senior posts at P4 and P5, 10 middle level posts at P3 and 9 Junior level posts at P1 and P2. The Egyptian delegate noted that the new structure was abnormal and could be counter-productive, as experience in other organizations had proved. The present position with regard to the filling of these posts is at Annex II with 12 posts filled out of 38 established posts. 24. The Egyptian delegate expressed surprise at the non-appearance of the Agriculture and Industry Divisions, contrary to the prominence that these two sectors had been given in the COMESA Treaty as articulated in Chapter 18 and Chapter 12 respectively and also as articulated in Chapter VIII and IX of the Abuja Treaty establishing the African Economic Community. The Burundi and Swaziland delegates also shared the view of the Egyptian delegate of re-establishing the Divisions of Agriculture and Industry without additional financial implications. 25. The Egyptian delegate also stated that the ratio between professional and support staff, i.e. 38: 49 was unrealistic and should be reviewed taking into consideration what pertains in other similar international and regional organizations. The delegate justified the need for consequent adjustments with a view to strengthening COMESA and making it more manageable and effective. He further noted that the current concentration of P4s is from experience, bound to create unhealthy competition and demotivation in cases where the officers reach the maximum salary scale without opportunities for upward mobility. 26. In considering the concerns raised by the delegates of Burundi and Egypt, the Committee observed that no organizational structure is static and as such a review of the structure would be undertaken in due course. The views expressed by the two delegates would be taken into account during such a review. The review of the organizational structure should make reference to the already established Division of Investment Promotion and Private Sector Development, with room for redeployment once the exercise is done. 27. On the issue of concentration of P4s being a liability, the Committee noted that the current structure was based on time specific contracts that allow an officer COM/ADM/ADC/VII/7 Page 8 to serve for a maximum period of 12 years only ; hence there was no automatic career progression. Consequently, the dangers of unhealthy competition and demotivation were unlikely to arise and that conflict may not be necessarily serious. Whereas this was the case, the delegate of Egypt stated that the current structure was not suitable for a professional organisation taking into account the high levels of professionalism required by the FTA and CET. 28. Regarding the title of the Division of Investment Programming and Private Sector Development, the Committee noted that the title was adopted by the Council in view of the fact that, investment into the productive sectors, (Agriculture and Industry) and the transformation of the private sector as the regions’ engine of growth were the two most critical factors facing COMESA member States. This view was expressed notwithstanding the views expressed in paragraph 24 above. Observations 29. The Committee made the following observations: (a) There was overlap in the case of the posts of Technical Co-operation and Resource Mobilisation, and that of Senior Investment Promotion Officer. While noting that the functions of Technical Co-operation and Resource Mobilisation are carried out by the Secretary General and Assistant Secretary General in practice, the Committee agreed that the job description of the officer should clearly reflect his/her duties in providing the necessary assistance to the Secretary General and Assistant Secretary General. The Committee was informed that the COMESA Secretariat now receives substantial external resources which need follow-up. Other duties included detailed negotiations, project preparation and correspondence. The delegates of Egypt and Mauritius observed that the function of Technical Co-operation and Resource Mobilization could be performed by the Public Relations Officer. (b) Notwithstanding the views expressed in paragraph 24 by delegates of Burundi, Egypt and Swaziland, in the case of the Division of Investment Promotion and Private Sector Development, the Committee noted that attracting Foreign Direct Foreign Investments (FDI) will be enhanced with the establishment of the Free Trade Area in the year 2000 and will be boosted by the Common External tariff (CET) in the year 2004 as is the case in other economic integration zones in the world. Taking into account that likelihood, the Committee recommends that filling of the remaining posts in the Division of Investment promotion and Private Sector Development be phased in such a manner that it allows the critical programmes in industry and agriculture to be implemented and included as sections of the division. The Committee further noted that whereas the FTA and CET were necessary conditions for attracting FDI’s, they would not on their own be sufficient to effectively attract COM/ADM/ADC/VII/7 Page 9 FDI’s because the implementation of policies and programmes on the COMESA Common Investment Area was a sine qua non. The Committee recalled that the Third Summit of the COMESA Authority had declared the COMESA region a Common Investment Area and that an appropriate programme being formulated takes into account the experiences of other regional economic organisations particularly the ASEAN Investment Area (AIA). Recommendations 30. The Committee then considered the recommendations of the Sub- Committee and made the following recommendations: (a) There were inconsistencies with regard to qualifications and working experience, for the same grades in the structure. The Committee therefore recommends that the qualifications and experience set out in the table below be applied. GRADE P5 P4 P3 P2 P1 Minimum of Minimum of Minimum of Minimum of Minimum of a EDUCATION Masters Masters Bachelors Bachelors Bachelors Degree. A Degree. A Degree. Degree. Post Degree Post Ph.D would Ph.D would Post graduate Graduate is be an added be an Graduate Degree is an an added advantage. added degree is an added advantage advantage. added advantage advantage WORKING EXPERIENCE 15 years 10 years 8 years 6 years 4 years (b) The commencement dates should not be part of the job descriptions and should be removed. (c) The tasks outlined in the various job descriptions be harmonized and synchronized with the responsibilities of the various posts. (d) There is duplication in the job descriptions of the posts of Human Resources Management and that of Head of General Services. The Committee further noted that in the case of Head of General Services, the tasks outlined were personnel functions, whereas decision-making was administrative. The Secretariat be directed to prepare fresh job descriptions for the two posts . 31. The Committee recommends, as a general rule, that all approved professional posts to be filled should be phased over a period that takes into COM/ADM/ADC/VII/7 Page 10 account the workload, staffing levels and financial implications. The Secretariat should carry out this exercise in conjunction with the established committees. 32. The Secretariat should make arrangements for the preparation of a booklet of career guidelines for COMESA, taking into account the above recommendations. 33. The Committee recommends that the amended job descriptions contained in a separate document No. COM/ADM/ADC/VII/2(a) be submitted to the Intergovernmental Committee. In considering the job descriptions, the Committee recommended that the Secretariat in liaison with the various Heads of Divisions should re-examine the tasks outlined and identify the key tasks for all the posts for incorporation in the career Guideline Booklet. Draft Staff Rules and Regulations 34. A copy of the Draft Staff Rules and Regulations prepared by the Consultants was presented for discussion. 35. The Committee noted that the preparation of the Draft Staff Rules and Regulations was in line with Council decision of December 1998 and in accordance with Article 188 of the COMESA Treaty. The Committee noted that except for a few areas, the Draft Staff Rules and Regulations followed the existing Staff Rules and Regulations. 36. In the discussions that followed the Committee made various modifications which are reflected in the Final Draft attached hereto as Annex I. The Committee recommends the adoption of the new Staff Rules and Regulations. STAFF RECRUITMENT (Agenda Item 4) 37. The Committee was informed that the procedure for appointments of Directors of Divisions as well as Legal Counsel were governed by Rule 23(3) of the Staff Rules and Regulations and reads as follows: “Appointments for the posts of Directors of Divisions as well as appointment for the post of Legal Counsel shall be made by the Council on the recommendation of a Selection Panel established by it. The Panel shall be composed of members of the Public Service Commission or Permanent Secretaries from at least three Member States which shall have not submitted candidates for the posts advertised. Such persons should be qualified to carry out the interviews.” 38. The procedure for appointments of professional staff at COMESA Secretariat other than Directors were governed by Rule 23(5) of the Staff Rules and Regulations and reads as follows: COM/ADM/ADC/VII/7 Page 11 “Interviews for appointments to posts in the Professional Category except those of the Secretary-General, Directors and post of Legal Counsel, as well as interviews for appointment to posts in the Intermediate Category shall be conducted by a Selection Panel of a minimum of three members where the Secretary-General deems it necessary. The Panel shall be appointed by the Secretary-General in consultation with the Director of Division concerned who shall be a member of the panel. The Director of Administration or his representative shall be an ex-officio member. The Secretary-General shall be the Chairman of the Panel”. 39. The Committee was further informed that the Bureau of the Council of Ministers was scheduled to meet 19th May 1999 in Nairobi, Kenya to approve the recommendations of the Panel. 40. The Committee recalled the directive of the Authority at its Second Summit held on 10th April 1997 in Lusaka, Zambia (vide Document No. COMESA/AUT/II/I, paragraph 5.5(c)) with regard to sanctions against Member States that default in paying assessed contributions to the COMESA Budget that reads as follows: “(c) No new recruitment should be undertaken from Member States with arrears of two years or more.” 41. The Committee noted that the recruitment for the various posts in the Secretariat excluded defaulting Member States in accordance with the Authority decision. 42. The Committee further noted that Permanent Secretaries from COMESA Co-ordinating Ministries as well as senior experts in specialised fields being interviewed had constituted the interview panels. 43. Advertisements were sent out to Member States on 25 th January, 1999, and the following candidates were short-listed: (a) Director, Investment Programming and Private Sector Development (P5) (i) Dr. T. F. Shamloula (Egypt) (ii) Mr. P.A. Kegode (Kenya) (iii) Mr. Mahmood Mansoor (Mauritius) (iv) Dr. Chungu Mwila (Zambia) (v) Mr. G.S. Bvute (Zimbabwe) COM/ADM/ADC/VII/7 Page 12 (b) Senior Programme Analyst (Monetary) (P4) (i) Mr. Ibrahim Zeidy; (Ethiopia) (ii) Mr. Kefa L. Muga (Kenya) (iii) Mr. Austin M. Matale (Zambia) (c) Senior Programme Analyst (Infrastructure Development) (P4) (i) Mr. Estifanos Zerai(Eritrea); (ii) Mr. Gilbert M. Maeti (Kenya); (iii) Mr. Winston S. C. Mwandila (Zambia) (d) Public Relations Officer (P3) (i) Mr. Mweusi Karake (Rwanda) (ii) Miss. Monica Chetty (Seychelles) (iii) Mr. Edward Twine (Uganda) (iv) Mr. Joseph Mkandawire (Zambia) (v) Dr. Heaven Chifwamba (Zimbabwe) (e) Information Systems Analyst (P3) (i) Mr. Ombura E. Odhiambo (Kenya) (ii) Mr. Krishna Seeburn (Mauritius) (iii) Mr. James Okedi (Uganda) (iv) Mr. Sikaaba Mulavu (Zambia) (v) Miss. Isabel Nshimbi (Zambia) (vi) Mr. Courage Bhebhe (Zimbabwe) (f) Trainee ADP Expert (ASYCUDA) (P2) (i) Mr. Yvon Nininahazwe (Burundi) (ii) Mr. Eyasu Yemane Bekit (Eritrea) (iii) Mr E. B. Chimanse (Zambia) 44. The candidates were invited to attend the interviews which took place in Lusaka from 3 – 6 May, 1999. 45. The interview panels used six criteria adopted by the Council to allocate scores against each criterion in the evaluation of the candidates. The criteria that was established by Council in June 1987 is as follows: COM/ADM/ADC/VII/7 Page 13 (1) Qualifications 25 points (2) Relevant Experience 20 points (3) Knowledge of requirements of the post 25 points (4) Knowledge of COMESA 10 points (5) Geographical Distribution 10 points (6) Disposition 10 points Total 100 points 46. The delegate of Eritrea made a reservation concerning the Selection Panel for the post of Senior Programme Analyst. Eritrea was concerned that the selection panel included an Ethiopian official whereas one of the candidates was from Eritrea in which case there was no sensitivity to the prevailing conflict between Ethiopia and Eritrea. The delegate of Ethiopia raised concern that such an issue could be raised when the members of the panel were selected on a professional basis and in accordance with the existing Rules. In view of the fact, that one Eritrean candidate (ADP Expert) was recommended for appointment by the same panel chaired by the Ethiopian panelist, the delegate of Ethiopia stated that the concern of possible bias raised by Eritrea was not supported by the results. Recommendations 47. The Interview Panels recommended that the following candidates be appointed to the posts indicated against their names: Name Country Post Dr. Chungu Mwila Zambia Director, Investment programming and Private Sector Development Mr. Ibrahim A. Zeidy Ethiopia Senior Programme Analyst (Monetary) Mr. Gilbert M. Maeti Kenya Senior Programme Analyst (Infrastructure Development) Mr. Mweusi Karake Rwanda Public Relations Officer Miss Isabel Nshimbi Zambia Information Systems Analyst Mr. Eyasu Yemane Bekit Eritrea Trainee ADP Expert (ASYCUDA) COM/ADM/ADC/VII/7 Page 14 48. In the discussions that followed the delegation of Congo D.R. expressed concern that member States with arrears of two years or more would be excluded from the recruitment process of the COMESA Secretariat. It was felt that once a country had committed itself to clearing its arrears it should not be excluded from competing for posts in the Secretariat since such a practice would not involve fair geographical distribution as well as language representation. Congo D.R., therefore, recommended that a proposal could be made to have the sanctions suspended where a State shows serious intention to settle the arrears. 49. In considering the issue of sanctions, the Committee noted that the sanctions were adopted by the Authority and that even if an exemption were to be given by the Authority, the State would still be subject to the sanctions unless it complied with an agreed plan. The Committee agreed that the matter could only be submitted for consideration to the Council of Ministers who can make recommendations to the Authority. 50. Burundi expressed concern that the names of their six candidates which had been submitted to the Secretariat were not considered as the C.V.s were received much later by COMESA. The Burundi delegation explained that their understanding was that the CV’s had been received in time (18th May, 1999) and they should have been considered. However, the Secretariat reported that the Burundi CV’s were received after the shortlisting had taken place and that communication had been sent to member countries inviting the shortlisted applicants. In addition the meeting was informed that the Secretariat had communicated to Burundi that it would not be possible for the candidates to be considered for shortlisting without the CV’s. Accordingly, a request was made that Burundi dispatches the CV’s by an Express Courier such as DHL. Notwithstanding the request from the Secretariat the CV’s were delivered by hand to the Secretariat in Lusaka, Zambia on the 18th May 1999. 51. Eritrea also informed the Committee that it faced a similar problem to that of Burundi regarding delayed communication and should as well be given special consideration when time limits for submitting applications were being fixed. However, the meeting was informed that ample time had been given (2 months) before the closure of applications. In addition it was difficult to keep postponing the deadline since it would be difficult to know when to stop such extensions. 52. Some delegates suggested that where two candidates were very close, the candidate from the country which was disadvantaged in geographical distribution should be appointed. However, it was noted that this would be contrary to the interview criteria adopted by Council which already allocates points for geographical distribution. In addition the award of points for geographical distribution are on the basis of a scientific method as indicated in Annex III. The Committee also recalled that the Treaty provides under Article 17(5) that technical competence and integrity were paramount. COM/ADM/ADC/VII/7 Page 15 Recommendation 53. The Committee recommends that the following candidates be appointed to take up posts in the COMESA Secretariat as follows: Name Country Post Dr. Chungu Mwila Zambia Director, Investment programming and Private Sector Development Mr. Ibrahim A. Zeidy Ethiopia Senior Programme Analyst (Monetary) Mr. Bilbert M. Maeti Kenya Senior Programme Analyst (Infrastructure Development) Mr. Mweusi Karake Rwanda Public Relations Officer Miss Isabel Nshimbi Zambia Information Systems Analyst Mr. Eyasu Yemane Bekit Eritrea Trainee ADP Expert (ASYCUDA) Brief on COMESA Headquarters (Agenda item 5) 54. The Committee noted that the acquisition of the Headquarters building had greatly improved the image of COMESA. 55. The Committee was informed that the Chairman of the COMESA Authority President F.T.J. Chiluba inaugurated the COMESA Centre on 8th December 1998 before an international audience that included the full COMESA Council of Ministers. 56. The extra space equivalent to about 50 per cent of the building had been let out. The Centre had attracted quality tenants which brought in a gross income of about COM $600,000 per annum. The rentals are used for the repayment of the Loans that were obtained to acquire the building. 57. The Committee recalled that Contributions to the PTA Headquarters Construction Project were received from the following member States: COM/ADM/ADC/VII/7 Page 16 COM $ Burundi 25,880.38 Comoros 1,274.09 Ethiopia 100,000.00 Mauritius 203,313.00 Sudan 112,951.21 Uganda 99,203.00 Zambia 178,751.43 Total Receipts 721,373.11 58. The Committee was informed that COM $501,686 of the funds received were spent on the pre-construction phase of the project and were therefore not available for the implementation of the purchase option under the COMESA Centre. 59. The Committee was further informed that payments received from the member States for the purchase of the COMESA Centre were as follows: COM $ DR Congo 212,503.00 Egypt 367,053.00 Eritrea 37,053.00 Kenya 367,053.00 Mauritius 3,690.00 Zambia 2,200,000.00 Total Receipts 3,187,352.00 60. The Committee noted that the following member States were yet to make their contributions to the Headquarters project or to clear their outstanding balances: COM $ Angola 229,000.00 Burundi 39,219.62 Comoros 35,778.91 Ethiopia 69,053.00 Madagascar 105,253.00 Malawi 106,903.00 Namibia 89,028.00 COM/ADM/ADC/VII/7 Page 17 Rwanda 60,428.00 Sudan 75,626.79 Swaziland 72,803.00 Tanzania 196,003.00 Zambia 371,248.57 Zimbabwe 367,053.00 Total Outstanding amount 1,817,397.89 61. The Committee further noted that two former member States of COMESA had left the organization without paying their obligations towards the COMESA Centre namely: COM $ Lesotho 37,053.00 Mozambique 103,877.00 Total Unpaid obligations 140,930.00 62. The Committee was informed that it was doubtful that the unpaid contributions from the two member States were likely to be available to the COMESA Centre Project. 63. The Committee noted that the consolidated schedule of the status of member States’ contributions to the PTA/COMESA Headquarters Project is at Annex III to this Report. Status of Shelter Afrique and PTA Bank Loan Repayments 64. The Committee was informed that as at 14TH May 1999, the Status of the two loans that were mobilized to supplement COMESA’s own resources to purchase the COMESA Centre was as follows: COM/ADM/ADC/VII/7 Page 18 Shelter Afrique PTA Bank Interest Loan Loan Paid COM $ COM $ COM $ Loan advanced to COMESA 2,000,000.00 750,000.00 - Interest 14.09.98 56,054.79 Repayment 31.12.99 100,000.00 - 55,452.05 Repayment 31.01.99 - 93,750.00 45,000.00 Repayment 31.03.99 100,000.00 - 51,534.25 Total Repayments 200,000.00 93,750.00 208,041.09 Unpaid Balances 1,800,000.00 656,250.00 65. The Committee agreed the interest charge on the loans was quite substantial and made the loans very expensive for COMESA. The heavy interest charge representing 45% of the principal repayment illustrate the urgent need for member States who had not yet contributed to the project to do so without delay. Interim Measures being taken by the Secretariat 66. The Committee noted the interim measures that were being undertaken by the Secretariat to negotiate in order to obtain cheaper financing. The Committee was informed that if the Secretariat was successful, the new financing scenario would be as follows: (a) the balance on the PTA Bank loan of COM $656,250 (plus accumulated interest) would be wholly paid off. The interest charge on this loan is currently 12 per cent. (b) A loan of US $2,000,000 will be obtained from an offshore bank at an interest rate of 6.5 – 7 per cent. The funds will be used to pay off the entire amount owed to Shelter Afrique plus the accumulated interest. (c) An additional interest charge of at least 21/2% is likely to be paid to the guarantor bank. 67. Burundi informed the Committee that she would make her contribution to the Project as soon as possible. COM/ADM/ADC/VII/7 Page 19 68. Swaziland and Zimbabwe reported that arrangements were being made to make a payment towards the project before the end of the current Policy Organs Meetings. 69. The status of member States contributions towards the COMESA Centre as th at 14 May, 1999 is shown at Annex IV. Recommendations 70. The Committee recommends as follows: (a) Member States who have not yet made their contributions towards the Headquarters project should do so without delay so as to eliminate the heavy interest payments that the Secretariat is currently facing. In the meantime only member States that had not paid would continue to accrue the interest payments; (b) The Secretariat be mandated to continue with its efforts to raise cheaper loans to finance the project. However, the preferred option is for member States who have not yet paid their contributions to do so; and (c) Mozambique and Lesotho which owed the project COM$ 140, 930 should meet their obligations while they were members of the COMESA. The Committee noted that it may be difficult to realise these amounts as the two member States did not sign the COMESA Treaty, but agreed that the amounts should be warehoused and necessary action be sought as to how the amounts could be realised. 1999 Budget Performance and contributions to the budget of COMESA Secretariat (Agenda item 6) 71. The Committee was informed that the 1999 Budget Performance Report covered the period 1 January to 30th April 1999. 72. The meeting acknowledged the effort several Member States had made to not only clear their arrears of contributions but also to meet their assessments during 1998. As a result of this positive performance the Secretariat had realised payments equivalent to 87 per cent of the 1998 Budget. 73. The Committee recalled that Article 166(4) of the COMESA Treaty provides that fifty per cent of the contributions due from a Member State shall be paid into the budget of the Secretariat within one month from the beginning of the financial year to which they relate and the remainder shall be paid within six months from the beginning of that financial year. COM/ADM/ADC/VII/7 Page 20 74. The Committee further recalled that in November 1998, Council had approved a total 1999 COMESA Budget of COM $5,816,000 that was made up of a Recurrent Budget of COM $5,136,000 and a Development Budget of COM $680,000. By 14th May 1999, the Secretariat had received COM $2,220,359.56. The Committee further noted that the total amount due to COMESA Secretariat as at 14 May, 1999 is as at Annex V. 75. The Committee was informed that the Secretariat had embarked on an exercise to review ways of raising additional funding of its operations. The exercise was still in its early stages and concrete proposals and recommendations would be submitted to the November meetings of the Policy Organs. Some of the ways currently being considered included the introduction of a special COMESA Levy. 76. The Committee was briefed on the 1999 Work Programme implementation that included the following elements: (a) Finalisation of the 1999 Work Programme and putting in place its implementation and monitoring mechanisms. (b) Critical success factors were established to ensure that a Free Trade Area was achieved by October 2000. (c) A total of 10 Technical meetings and Seminars were serviced up to 30th April 1999. (d) Preparations for the Fourth COMESA Summit and the preceding meetings of the Policy Organs were made. (e) The Monetary Co-operation Programme was re-launched through the Fourth Meeting of the Central Bank Governors and that of the Second Meeting of the Ministers of Finance which amongst other things restructured the operations of the COMESA Clearing House. (f) The programmes with co-operating partners was further consolidated and in some important ways widened. 77. The Committee was further informed that Madagascar had submitted a Plan to the Secretariat whereby she would pay the 1999 and 1998 Budgets and clear her outstanding arrears for 1995 to 1997 together with assessed budgets for years 2000, 2001 and 2002. The Government of Madagascar had requested the Council of Ministers to approve this arrangement. 78. The Committee was informed by the Congo D.R. delegation that Congo D.R. was submitting a plan for clearing her arrears to the Secretariat. COM/ADM/ADC/VII/7 Page 21 79. Swaziland reported that all arrears due to COMESA are covered in the National Budget for this year whose Appropriation Bill has recently been passed by Parliament and is awaiting assent. Payment will be made in due course. 80. Rwanda informed the Committee that she had made her contributions for 1999 Budget for both the Secretariat and the Court of Justice. An instalment payment for clearing arrears as adopted by the Authority had been processed and would reach the Secretariat soon. Rwanda reported that a further payment had been made towards Rwanda’s assessment to the COMESA Headquarters project. 1999 Budget Performance of the COMESA Court of Justice (Agenda item 8) 81. The Registrar of the COMESA Court of Justice introduced document COM/ADM/ADC/VII/6 for noting. He outlined the highlights of the Report which were as follows: (a) The Report covered the period January 1998 to 30th April, 1999; (b) The 1998 budget was COM$258,770 after the admission of the Arab Republic of Egypt; (c) To the 1998 Budget of COM$258,770 only five member States contributed a total of COM$62,449; (d) The expenditure of the Court in 1998 came to COM$71,466.61 resulting in a deficit of COM$9,017.61; (e) The budget approved by Council for 1999 is COM$493,457 and with the 1998 arrears of COM$196,321 the total contributions expected from member States came to COM$698,778 for 1999; (f) As at 30th April, 1999 only three member States have made payments amounting to COM$156,405.61 after removing the deficit the amount came to COM$147,388.00; (g) The expenditure of the Court from January up to 30 th April, 1999 is COM$59,900.94 with the balance of cash available standing at COM$87,387.06; and (h) The total amount outstanding from member States who have not yet paid is therefore, COM$533,372.39 (see Annex VI) making it difficult for the Court to undertake its budgeted items for this year. 82. In the light of the above information, the Registrar appealed to the member States who had not yet paid their contributions to the Court’s budget to pay as a COM/ADM/ADC/VII/7 Page 22 matter of urgency in order to avoid a situation whereby Court’s activities may ground to a halt. 83. The Committee while noting the Report, expressed concern on the arrears of contributions and urged the member States to pay their contributions to enable the Court to fulfil its mandate. Any other Business (Agenda item 10) COMESA Vision and Strategy document 84. The Secretary General informed the Committee that the Secretariat was in the process of developing the future strategy of the organisation so that the Secretariat and the Member States could move in unison when implementing agreed programmes. 85. The Draft Vision and Strategy document circulated to the delegates was still being refined but comments by Member States would be useful. Various interested parties including the Business Community were encouraged to submit their contributions to the Secretariat. Recommendation 86. A meeting of representatives of member States and selected development partners should be convened in the second half of 1999 to discuss the COMESA Vision and Strategy document. The final proposals would be considered by the next Policy Organs Meeting to be held before the end of 1999. Adoption of the Report and Closure of the Meeting (Agenda item 11) 87. The meeting adopted its report with amendments. The Chairman thanked the delegates for their contributions which had made the meeting success.