Regional experts upbeat over monetary union

KIGALI - Financial experts from East African countries, who are currently meeting in Kigali, are optimistic that a regional single currency will be adopted by next year. They said that they have now reached an advanced stage to discuss the exact establishment of the protocol. The EAC, in January this year, inaugurated the High Level Task Force (HLTF) to negotiate the Protocol to establish the East African Monetary Union (EAMU), which is the third stage of the EAC integration process. The fourth meeting of the task force, which will end today, is aimed at further negotiating articles to be included in the protocol. According to the timetable of the EAC integration process, the monetary union is supposed to be effective by end of 2012 after the EAC Common Market Protocol and the Customs Union that went into force last year and in 2005, respectively. In an exclusive interview with The New Times, Dr. Thomas Kigabo, the Chief Economist at the National Bank of Rwanda, and Rwanda’s chief negotiator on the taskforce, pointed out that the remaining period is enough for the single currency to be adopted. “Initially, we were discussing various issues like planning, but we have now reached a stage of real negotiation on the monetary union and I am absolutely optimist that by the end of next year, we shall be having this protocol,” he said. He said the regional monetary union is expected to be the ultimate antidote against inflation that has continued to hit the regional member states, especially Uganda. If it comes into force, the monetary union would see the five EAC countries merge their economies into both a common regional monetary institution, an East African Central Bank and eventually a single currency. The Permanent Secretary in the EAC ministry, Robert Ssali, observed that if the single currency is not put in place, even the two protocols already in place will not be effectively achieved. “We cannot talk of free movement of goods and services in the region without a single currency.” “It’s an important protocol; for example, if you’re travelling to Nairobi, Kampala, or Bujumbura, you have to change your money to get new currencies and in the process, you lose a lot of money. Julius Mutua Kenya’s chief negotiator, acknowledged that they are using experiences from other blocs like the European Union, adding that this would help to shape the East African single currency. The European Union is united by a single currency, the Euro. Ends