EAC inches towards monetary union stage

Dr Sezibera
The East African Community (EAC) is expected to enter into monetary union chapter before end of the year to pave the way for a roadmap for attaining the bloc’s single currency. 

The EAC Secretary General, Dr Richard Sezibera, told the 'Daily News' in Dar es Salaam mid this week that the monetary union would be executed in phases until it has reached its summit just like the custom union which has been instituted in the past ten years. 

“Partner states are committed and are still negotiating the monetary union, prior for the signing before end of the year,” Dr Sezibera said.

He said the signing would see the stage for the implementation of the monetary union’s roadmap, which is in phases, until all necessary macroeconomic fundamentals are converging to warrant a single currency.

The signing is drafted for December.   “We are not rushing to single currency before putting our house in order…the single currency will come but at a later date,” Dr Sezibera said.Last month economists urged the EAC to take time before setting up a monetary union to avoid any future crisis, similar to the ongoing Euro zone currency difficulties. 

However, he said that the Euro zone crisis helped the EAC to seal the weak points which in turn strengthened and shaped the bloc’s union.

Apart from the ongoing negotiations of the protocol, the member states have intensified preparations for the crucial harmonization of monetary and exchange rate policies, payment and settlement system, and regionalization of the financial sector in order to create a single financial market, plus a fiscal  union. 

In last month’s meeting sponsored by the Canadian International Development Agency (CIDA) and co-hosted by the Secretariat of the EAC and the International Monetary Fund (IMF) in Arusha, the regional policymakers reaffirmed their vision for building a strong economic base.

 Dr Sezibera said in a press statement issued by IMF that the EAC is eager to build on the experience of Euro zone countries and other regions in designing the monetary union. 

IMF Deputy Managing Director Mr Naoyuki Shinohara said good progress in regional integration has been made through the launch of customs union and common market projects.

“A critical question relates to the appropriate pace for moving beyond a common market to monetary union. Certainly, good progress in implementing the customs union and common market will strengthen prospects for a successful monetary union,” he said in the statement. 

The EAC currently has a population of about 150 million people with a combined Gross Domestic Product of 74 billion US dollars (about 118.4trn/-).
Source: The Daily News,www.dailynews.co.tz, reported by Abduel Elinaza
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