EAC 'shilling' may be on its way, but watch out for TUSKER-B

SHORTLY AFTER South Sudan gained independence in 2011 and subsequently expressed interest to join the East African Community (EAC), the catchy acronym, TUSKER-B, came into being. The acronym stands for Tanzania, Uganda, South Sudan, Kenya, Ethiopia, Rwanda and Burundi. Tongue-in-cheek, there are those who joked that the acronym was suggestive of some football team, perhaps Kenyan, after the soccer team sponsored by the country’s major brewery. Perhaps more positively, there were those familiar with the Kenyan larger (inadvertently suggested in the acronym and) sold in all these countries who thought the tag creatively enjoins the regional neighbours around a familiar brand striking a resonant ring – “one that will stick to the mind.” But, jokes aside, the tag has nothing to do with Kenya. It has everything to do EAC. Like South Sudan, Ethiopia may eventually join the EAC. But the inevitable link to the region is obvious, as can be seen in the Lamu Port transport (LAPSSET) corridor project that will link Kenya to South Sudan, Ethiopia and Uganda with a new road network, a railway line and oil pipeline. When the LAPSSET project comes to fruition as expected, it will benefit not just the countries in the corridor but the entire TUSKER-B region, of which the EAC has already set the ball rolling with the operationalisation of the Customs Union and the Common Market. Indeed, given the way the EAC has ‘organically’ grown from the initial three countries, it arguably is the linchpin to the potential locked in the region. It came into force in 1999, and started with a customs union between Kenya, Tanzania and Uganda, then added Rwanda and Burundi as members in 2009. It began operating a Common Market between all its members in July 2010. Even with South Sudan and Ethiopia included, it needs no stating the countries’ fortunes are intertwined in their geographical proximity and economic interests, and that their collective fate is cemented by cross-border socio-cultural similarities making it a seamless market. With a combined population of well over 250 million the economic pay-off stands to be huge collectively and for each of the TUSKER-B countries, especially if we take into consideration the foreign investment the market may attract. With such a promise, the EAC may yet grow to include more countries in the larger Eastern and Horn of Africa. But we are well aware in the current status quo that the EAC Customs Union and Common Market are yet to take hold as envisaged in their protocols. To remove all the barriers is something that is continuously being worked on in each of the current EAC member states, even as the regional dream begins to flower. In the meantime, the Heads of State signed the protocol on the establishment of the East African Monetary Unit (EAMU) in November 2013 and directed that the partner states ratify it by July, this year. Only one country has so far ratified the protocol. Expected to be finalised by 2015, the EAMU Protocol outlines a 10-year roadmap towards a single currency by the year 2024. The single currency is the third pillar of the EAC integration after the Customs Union and the Common Market. Of the three pillars, besides the political federation, the establishment of the EAC Shilling (or whatever the single currency will be called) will be the most discernible proof of our integration and inherent promise. A single currency not only eliminates fluctuating exchange rates and exchange costs, but also stabilises and enables the economy to grow. Undergirded by sound economic principles, this is the promise the EAC seeks to deliver. But with the confidence in which the EAC is marching towards economic integration, it should be hoped that the lessons of the Euro will have been learned and taken to heart so that EAC does not take the same ‘ill-fated route’. Of course it is unlikely the EAC will change its name to TUSKER-B, but accomplishments so far illustrate how things probably should be done if Africa is to realise its potential through regional economic communities. The writer is a commentator on local and regional issues.

Opinions

EAC 'shilling' may be on its way, but watch out for TUSKER-B