EAC states to wait till 2031 for a regional monetary Union

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NAIROBI, Kenya - The East African Community [EAC] countries will have to wait till 2031 to have a monetary union, a senior official has announced.

The East African Monetary Union (EAMU) task force reviewing the proposed regional monetary union has indicated that the 2024 deadline is unachievable since the majority of member states have not attained all requirements.

The EAMU is a third pillar of the EAC integration blueprint plan.

According to Dr Pantaleo Kessy, Principal Economist, EAC- Secretariat, “We have a roadmap that was supposed to be implemented between 2013, when the Monetary Union protocol was signed, and 2024. But we did not manage to implement most of the activities in that roadmap. Our initial roadmap, the EAC convergence criteria were to be attained by 2021 and be maintained for three years in the run-up to the establishment of the Monetary Union in 2024.”

The EAMU task force report shows that all the partner states - Burundi, Kenya, Uganda, Tanzania, Rwanda, and South Sudan - are behind schedule.

EAMU roadmap, four broad prerequisites need to be achieved ahead of the establishment of the Monetary Union and the first one includes the full implementation of the Customs Union and Common Market protocols.

“EAC member states are at different levels of implementation and that partly slows the implementation of the EAC third pillar, the EAMU,” said Dr. Kevit Desai, Principal Secretary at the EAC and Regional Ministry of Kenya.

The region set up institutions that will carry out the mandate and implement the EAMU protocol.

EAMU task force is made up of financial experts from EAC’s partner states’ ministries of Finance, Central Banks, capital markets, insurance, and pension firms.

The East African Monetary Institute is one of the institutions expected to carry out the preparatory work for the One Single currency under EAMU which was planned to be in place by 2024.

The Council of Ministers designated July 1, 2021, as the date for the coming into effect of the EAMI, the precursor to the East African Central Bank.
But the deadline is long past.

The other three institutions proposed under the EAMU include the EAC Financial Services Commission; the EAC Surveillance, Compliance, and Enforcement Commission; and the EAC Statistics Commission. The establishment of these institutions is lagging behind, partly due to a lack of resources.

GAROWE ONLINE

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