The East African Community (EAC) member states could soon be using each other’s currency to trade after the necessary legislations we assented to by the heads of states.
The East African Community (EAC) and Regional Development Cabinet Secretary (CS), Adan Mohamed speaking on Thursday during the East African Business Council 20th annual general meeting (AGM) said that the Monetary Union envisages a situation where there are a common monetary and fiscal policies that enables people to trade in a common currency.
“That programme is on track with the respective Central Banks in discussion and the necessary legislation has passed through the East African Legislative Assembly (EALA) with all the heads of states assenting to the law,” said Mohamed.
“The monetary institute is going to be created very soon and it is going to be responsible for laying the foundation for an environment where we can start using one another’s currency initially and after that we envisage to have one common currency for EAC,” said Mohammed.
The CS said that this will enable the citizens in the member states to trade seamlessly with one another more than is currently happening.
“Regional integration has increasingly become an important component in the global development agenda. Over the last three decades, all countries of the world have actively participated in regional integration through various multilateral and bilateral trading arrangements,” he explained.
According to Mohammed, these regional economic groupings are anchored on market-based policies, mainly liberalization, wide public, civil society and private stakeholder involvement; harmonization and convergence of macroeconomic policies, trade facilitating instrument.
“However, most African countries have not efficiently maximized and utilized the opportunities offered by these regional arrangements due to weak and inefficient institutional infrastructure coupled with inadequate enforcement and sanction mechanisms as well as lack of information on opportunities that exist at regional level,” he said.
He added that regional integration has also been hampered by such factors as participation in multiple Regional Economic Communities with different integration timelines, disjointed national institutional frameworks, inadequate supply capacity and inefficient trade logistics.
“Cumbersome customs administration procedures among other non-tariff barriers have also greatly inhibited the ability of business community to take advantage of the available opportunities in regional and international markets,” said the CS.
Mohammed said that at a practical level, since the 1980s EAC Partner States have undertaken comprehensive economic reforms aimed at reducing direct government intervention in the economy and stimulating the growth of the private sector which is fully recognized as the engine of economic growth.
At the regional level, initiatives to improve the EAC investment climate are ongoing through various Protocols, laws and regulations, policies, strategies and related action plans and through joint projects and joint programming.
By Joseph Ng’ang’a