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The EAC Monetary Union, single currency expected in 10yrs.



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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