East Africa readies for Monetary Union

September 10, 2009
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, NAIROBI, Kenya, Sep 10 – The East African Community (EAC) Secretariat is now inviting views from local stakeholders regarding the proposed East African Monetary Union.

The Secretariat’s Director of Planning and Infrastructure Philip Wambugu said on Thursday that these suggestions would be considered while setting up the Monetary Union, which signifies the realisation of the third pillar of EAC integration and which should be in place by the year 2012.

“This is quite an ambitious goal but yet not impossible to achieve. The next two and a half years are thus going to require a lot of hard work and commitment from both the partner States and the EAC Secretariat if the East African Monetary Union is to become a reality within the period,” he said.

He said the Secretariat and the five partner states have already endorsed an interim report from a study that among other things sought to recommend the structure of the proposed Union.

The study conducted by the European Central Bank also aimed to take stock of the current state of preparedness of the partner States for such an institution and to design a model protocol which will form the basis for the Union’s negotiations among the members.

A preliminary consultative meeting has been on going in Nairobi and has already called for the establishment of a regional Monetary Institute as a precursor to the East African Central Bank.  

A legal and institutional framework that would lead to the changeover to a single currency are also been considered.

More consultations will be held in Kampala (Uganda) and Kigali (Rwanda) next week and in Bujumbura (Burundi) the following week after which they will culminate at the EAC Headquarters in Arusha at the end of the month.

A final report detailing the laid out strategy and roadmap of attaining the regional monetary body is expected in January next year.

This development comes in the wake of a similar initiative by member states of the Africa Union who in March this year agreed to expedite the establishment of the continent’s Central Bank to be headquartered in Abuja, Nigeria.

The setting up of the continent’s Central Bank is expected to set the stage for the creation of a single African currency.

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