East Africa: EAC Kick Starts Monetary Union Move

Arusha — The process to establish four key institutions that will support the proposed East African Monetary Union (Eamu) has started, the East African Community (EAC) has said.

The four institutions include the EAC Monetary Institute, the EAC Statistics Bureau, the EAC Financial Services Commission and the EAC Surveillance, Compliance and Enforcement Commission.

Speaking here recently, the EAC secretary general, Mr Liberat Mfumukeko, said the process to lay the foundation for establishment of a monetary union were on gear.

"The dream is to have east Africans trade easily using any of their currencies and eventually have an East African common currency," he said in his maiden press conference recently.

He said the four institutions envisaged were needed because the establishment of a strong Monetary Union will require a robust institutional framework to ensure compliance and safeguard the convergence process.

The EA Monetary Protocol was signed in Kampala, Uganda in November 2013 during the EAC Heads of State Summit after negotiations which started in January 2011.

Once in place, the Monetary Union, whose protocol has ever since been ratified by the five member states of the Community, would promote and sustain a zone of sound monetary policy and prudent fiscal policies to reinforce the monetary policies.

The roadmap of the Eamu provides for its establishment over ten year period, time within which, the single currency shall be realized. At the same time, the exchange rate policy shall have a convergence phase and the conversion of exchange rates formulated.

Mr Mfumukeko, who took office in April this year, outlined his priorities for the next five years, among them being the consolidation of the Single Customs Territory (SCT) to cover all imports and intra-EAC traded goods, including agricultural and other widely-consumed products.

Further liberalization of free movement of skilled labour across the six partner states; Tanzania, Uganda, Kenya, Burundi, Rwanda and South Sudan will be enhanced as is regional industrial development through deliberate investments in skills development, technological advancement and innovation.