EAC to sign monetary union protocol

It is now official. The East African Monetary Union (Eamu) protocol will be signed this week during the Heads of State Summit in Kampala.

“The Draft Protocol met the requirements of the Treaty for Establishment of the EAC,” said Dr Enos Bukuku, the deputy secretary general (Planning and Infrastructure). 

Dr Bukuku spoke from the venue of the meeting where the five Presidents are expected to put ink to paper for yet another milestone in regional integration process

However, players are warning that the coming into force of the latest protocol is a rude reminder of the frustrations by East Africans who are yet to fully benefiting from past protocols.

The legal content of the monetary union was cleared by the EAC Sectoral Council on Legal and Judicial Affairs last week and will be the highlight of the Kampala Summit.

Even though a positive step, Mr Bukuku cautioned, a lot of ground work is needed to operationalise the new protocol. “After the signature of the Eamu Protocol by the EAC Heads of State, the next two years will see passage of Bills to support it.”

“Introduction of a single currency has been made clearer and now spells out how partner states will join the last stage of the Eamu and the East African currency will be the legal tender,” Bukuku pointed out.

The Summit is expected to announce the dates for the start of the single currency. But it is expected that commencement will be upon ratification by all five partner states namely Tanzania, Kenya, Uganda, Rwanda and Burundi. “At least three partner states can commence a single currency in accordance with the relevant provisions of the Protocol,” according to a dispatch from the EAC Secretariat sent upon the protocols approval.

Despite being cleared for the Heads of State signing, analysts believe there are still some bottlenecks to be cleared for the bloc to have a properly functioning monetary union.

Some senior EAC officials have hinted that it will take about 10 years for the protocol to start working. The EAC secretary general Dr Richard Sezibera says it was the turn of the policy makers as well as technocrats “to make our transit to the East African Monetary Union more seamless”. Negotiations for the Monetary Union may have taken a shorter time compared to the Customs Union Protocol which took over five years but worries abound if there will be any difference in roll-out speed. “We need a 10 year transitional period....we need to create institutions....we need to have some legal framework”, said Dr Bukuku.

The former economics don and deputy governor of the Bank of Tanzania (BoT) proposed the formation of the East African Statistical Bureau and the East African Monetary Institute prior to the Monetary Union.

Members of the East African Legislative Assembly (Eala) are among those who have aired their views on the need for EAC to bring to fruition all the protocols they have passed if the people are to fully integrate for delivery of tangible fruits of the work. 

Peter Mathuki from Kenya feels there was no need to delay the implementation of the Monetary Union for over a decade.

Ms Angela Kizigha from Tanzania said the good thing is that a timeline is set and challenged implantations to play by the goal.

Tanzanian legislator Abdullah Mwinyi says the envisaged Monetary Union Protocol would remain in paper “if we do not fully implement the other pillars of EAC integration”.

These are the Customs Union and the Common Market protocols which were signed in 2004 and 2009 and came into force in January 2005 and July 2010 respectively. The Monetary Union talks started in January 2011.

However, the Uganda minister responsible for EAC Affairs and current chairperson of the EAC Council of Ministers Mr Shem Bageine said the EAC would work closely with different agencies to see how to finance the Monetary Union.

“If all works well we may have a single currency in a shorter period”, the minister noted. An Eala member from Rwanda Dr. James Ndahiro remarked that it was important for the Protocol to be comprehensive.
Source: The Citizen, reported by Zephania Ubwani From Arusha, Tanzania
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