11th-09-2013 -
By Nankwanga Eunice Kasirye
The heads of state for the
east African community Member States will be appending final signatures on the
East African Monetary Union Protocol in November this year. This will begin a road map to attain harmonized
monetary and fiscal policies a head of a one currency system expected in 10
years time. The ministers of finance from the regional member states are
optimistic that major divergences that would hold back progressive
implementation of the monetary union are cleared.
The
primary underlying principle for a monetary union is to reduce the costs and
risks of transacting business across the national boundaries of the member states.
A single currency means that EAC Partner States would remove the costs of
transaction in different currencies and the risk of adverse exchange rate
movements for traders and travelers within the region.
The East Africa Monetary Union will deepen the
integration of East African economies and this will enhance the set objectives
of the Common Market. According to the
finance ministers in the region, a regional convergence policy is therefore
ready for adoption upon the signing of the monetary union protocol in November
this year. The east African regional payment system is under test to be fully
rolled out during the progressive implementation of the monetary union
Dr William Mgimwa, the Tanzania minister of
Finance says Harmonisation of Monetary and exchange rate initiatives are complete for
adoption.
According to Governor John Rwangambwa of
Rwanda, the regional bank governors have also worked with the finance ministers
to come up with a regional statistics policy frame work to help in progressive
implementation of the union. But the member countries ought to be more
principled and bent to supporting all the systems for smooth transition and
harmonization.
The
Burundi minister of Finance Tabu Abdallah Manirakiza wants all member
states to fully support the successful implementation
of each phase of the integration to attain a strong bloc internally. This according
to him will accelerate internal cohesion among member states to harness
collective economic growth and development.
Henry
Rotich, the Kenya finance minister, is optimistic that all member states are
determined to play their roles in the integration process and this will create
a smooth platform for practice and policy harmonization to minimize differences.
The
Uganda Minister of Finance Maria Kiwanuka says a number of strategies are also
adopted with the help of development partners to spur regional economic development with concentration
on communities around Lake Victoria.
The regional development project funded by the
World Bank will boost agricultural activities around the Lake for full
utilization of the fertile land and water supply. The ministers of Finance from East African Community
Member states met in Uganda for a series of meetings ahead of the head states
meeting in November that will see the signing of the regional Monetary Union protocol
The EAC integration is guided
by a Treaty that came into effect in 2000 and provides for the Customs Union,
Common Market, Monetary Union
and Political federation as the phases to attain the comprehensive integration.
The
east African Customs Union started in 2005 in a progressive approach up to 2010 when EAC
entered into a fully fledged Customs Union. The Common Market Protocol came
into force in July 2010 and will be implemented in a progressive approach until
2015. Upon full implementation, the region is expected to enjoy free movement
of labour and capital which requires a monetary union
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