As the 5 member States of the East African Community (EAC) prepare to enter a monetary union, some business people in Kampala are still unaware of the benefits that could accrue from the union. Ministers from the EAC adopted the draft protocol on setting up the East African Monetary Union during the 27th extra-ordinary meeting of the Council of Ministers that was in Arusha, Tanzania last week.
Ministers from the EAC adopted the draft protocol on setting up the East African Monetary Union during the 27th extra-ordinary meeting of the Council of Ministers that was in Arusha, Tanzania last week.
According to Annett Namara, the Principal Economist at the Ministry of East African Community Affairs (MEACA), the negotiating protocol is awaiting signatures from the heads of state at the next Summit to be held in November in Kampala.
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Meanwhile, the protocol document has been forwarded to the 15th Sectoral Council on Legal and Judicial Affairs which is meeting in Bujumbura, Burundi from July 22 to August 1, 2013 for legal input.
The protocol gives a 10-year roadmap to implement the EAC Monetary Union, which will see the use of a single currency for all partner states, though entry into the union is optional.
As members states face the task of harmonizing the legal and institutional framework before being admitted to the union, some traders who spoke to Uganda Radio Network on this subject expressed mixed reactions. Although some were excited about the prospects, others are hesitant to embrace the integration initiative.
For some, the knowledge and process of a Common Market is far from their reach, while others just want to cross the border and trade without hustle.
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Namara notes that in their negotiations, member states tried to borrow from existing sound monetary unions such the European Union.
However, to harmonize the demands of individual countries, members states need to create domestic statistical data, compliance surveillance and enforcement criteria and a finance services bureau.
She said it was adequate that member states start thinking of setting up institutions to support implementation of the union, to enable comparable statistical data to measure inflation, fiscal deficits and reduce a debt burden.
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East Africans stand to benefit from the monetary union if the progress is fast-tracked. The Customs Union and the Common Market have already set pace for the monetary integration, but their implementation is still a hard task.