EAC Leaders To Decide On Monetary Union In November

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In short
A decision on whether the East African Community should have a Monetary Union will be taken during the East African Heads of State summit scheduled for November this year.

A decision on whether the East African Community should have a Monetary Union will be taken during the East African Heads of State summit scheduled for November this year.
 
Monetary Union is where 2 or more countries merge their currencies by the creation of a new currency.
 
Uganda’s State Minister for East African Community Affairs Shem Bageine says the East African Legislative Assembly (EALA) is yet to harmonize its position on the Monetary Union.
 
Bageine adds that a report will be presented to the Council of Ministers in August this year in order to prepare a protocol for signing by the heads of state in November.
 
He said monetary union is difficult since the East African countries are operating at different economic levels.
 
Bageine says Gross Domestic Product (GDP), borrowing rates, inflation rates and exchange rates have to be discussed and harmonized so that institutions can be set up to manage the monetary union.
 
Institutions like the East African Central Bank, surveillance and compliance institution and others have to be set up so that the affairs of the monetary union are managed.
 
The minister further noted that a road map was set out, for coming up with a single currency over a period of ten years during which macroeconomic divergences are to be dealt with.
 
A monetary union can solve problems mainly in trade area, payment settlements and others.
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EALA Speaker Magaret Zziwa mentioned some of the programs that are hindered by the absence of a fiscal and monetary arrangement which are components of the monetary union.
 
Zziwa said that a regional social security body that the East African people long for cannot be achieved without a common social security regime that can enable one to transfer or move social benefits from one country to another.
 
She therefore said that there is urgency need for a full discussion of a monetary regime in order to achieve such a body that can enable a person to transfer his or her social benefits.

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