146_1999 May ADM Report

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146_1999 May ADM Report Powered By Docstoc


                                                      May 1999

                                               Original: ENGLISH


Seventh Meeting of the Committee on
Administrative and Budgetary Matters

Nairobi, Kenya
13-15 May, 1997

                    AND BUDGETARY MATTERS

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.



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

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
                                                                           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

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;
                                                                            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

       (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

                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”.
Page 6

      (f)     The Division of Private Sector Development and Investment
              Programming be retitled “Private Sector Development and Investment

      (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

           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
                                                                            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

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
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.


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
                                                                                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).


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
    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
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

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.


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:
                                                                         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

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)
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:
                                                                          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


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
 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
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.
                                                                            Page 15


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

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

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

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:
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

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

                                               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
                                                                     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:
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                                 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.
                                                                          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

69.     The status of member States contributions towards the COMESA Centre as
at 14 May, 1999 is shown at Annex IV.


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.
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

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.
                                                                        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
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.


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.

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