The East Africa Community (EAC) Council of Ministers, governing arm of the EAC, has come to the conclusion that the 2024 deadline for the formation of the EAC monetary union and the common currency is not attainable. EAC Monetary Union is viewed as one of the four critical pillars of regional integration.
The Council, took the decision after their meeting in Arusha last week. It has agreed to look at new timelines to achieve the ambitious target. Setting up of relevant institutions to support a single currency, was a pre-requisite for the Monetary Union. The East African Monetary Institute (EAMI), the equivalent of a regional central bank was supposed to become functional by 2015 but failed to take off. Other key institutions to be set up included the East African Financial Services Commission, East African Statistics Bureau, and the East African Surveillance, Compliance and Enforcement Commission.
It was also reported that member countries made little progress in harmonising the key economic policies and compliance of the EAC macro-economic convergence targets on inflation, public debt, forex reserves and budget deficits. The EAC Monetary Union protocol was signed by the heads of state in Kampala on November 30, 2013, agreeing to for a 10-year roadmap for member states to introduce a single currency regime. The objective of EAC single currency is to create more economic unity among member states, cut down transaction costs and eliminates exchange rate volatilities.
The EAC director of Monetary and Fiscal Affairs Pantaleo Joseph Kessy stated that“directive by the Sectoral Council on Finance and Economic Affairs is to review the EAMU roadmap and advise accordingly”.
