Talks on Single Currency among EAC states resume
Currency from major East African Countries. Photo courtesy of africareview.com
Kenya, Uganda, Tanzania, Burundi and Rwanda could soon have a common currency to make it easier to transact business within the region with the latest round of talks for its implementation scheduled to start Monday.
The High Level Task Force (HLTF) is the body mandated to lead the negotiations which will be held in Arusha, Tanzania for six days starting Monday 23rd.
Attainment of the Monetary Union goal is the third phase of the EAC integration process that could see the region adopt a single currency.
The HLTF is comprised of senior officials from the Partner States’ Ministries of Finance, Planning and Economic Development, East African Community Affairs, as well as Central Banks, Capital Markets Authorities, Insurance and Pensions Regulatory Agencies, and National Statistics Offices.
“Specifically, articles to be debated include those legislating the funding and operations of the proposed East African Central Bank; harmonization of accounting and reporting standards; establishment of the proposed East African Monetary Institute; as well as the schedule and timetable for establishment of the Monetary Union,” reads a statement from EAC.
Negotiations on the monetary policy commenced in January last year and are targeted to be concluded later on this year.
Some of the issues that have been ironed out so far going into Monday’s round of talks include the scope of the Monetary Union, macroeconomic policy framework, monetary policy framework, exchange rate policy and exchange rate mechanism; and instruments of monetary control.
Under Articles 5 and 82 of the EAC Treaty, member states are expected to come up with a monetary union and to co-operate in monetary and fiscal matters. It is expected that this phase will reduce the costs and risks of transacting business across the national boundaries of the federation.
In essence, the hurdles of incurring costs of having to transact in different currencies and adverse exchange rate movements for traders and travelers alike within the region will be eliminated with a common currency regime.
The EAC has made significant strides towards unifying the five countries ever since the Treaty for its establishment entered into force on July 7, 2000.
Already, integration on the level of Customs union and establishment of a common market have been harmonized making the talks on a single currency usher in the final stages of the four pronged unification strategy.
The final stage of the unification plans will be the establishment of a political federation and is expected to be underway starting next year. According to the EAC calendar, a full political federation is expected to be finalized by the year 2015.
