EAC states inch closer to setting up monetary union

The East African Community is on the verge of embracing the Monetary Union.

According to a statement from the bloc, the summit has earmarked November 30 as the day for entry into the third level of integration.

“This shall be a unique opportunity for the EAC to usher in the common currency and harmonisation of the macro-economic policies of the partner states,” said the Speaker of the East African Legislative Assembly, Ms Margaret Nantongo Zziwa.

Currently, the EAC is reviewing and negotiating the targets for macroeconomic convergence criteria on the following indicators: Inflation, fiscal deficit, debt to gross domestic product (GDP) ratio, and reserve cover on imports.

There are, however, many challenges hindering the integration process. Lack of viable pillars in the judicial and defence sectors leading to collapse of state authority have been cited as factors hampering the process.

According to chairperson of the summit of EAC Heads of State, Yoweri Museveni, attacks on private sector initiatives and under-development of human resources and skills are bottlenecks to achieving the integration. Other challenges cited include an under-developed service sector, lack of industrialisation, as well as democracy.

“There is a need for the region to resolve existing strategic bottlenecks if the EAC to spur integration and enable citizens to enjoy the accrued benefits,” said Mr Museveni, adding that such a move would see the region move from economic to political integration. 

He highlighted the necessity of an organised state with institutional structures and the effective address of existing bottlenecks. “We need to organise ourselves and take our rightful place and new chance. Africa has potential, but it must organise itself,” said Mr Museveni.

The Ugandan President said such a move would ensure that Africa taps into further economic growth and enables a stronger voice in the international arena. 

“There is a need to harness energy and electricity for development. Emerging new powerhouses like India, China, Indonesia, and Brazil have taken advantage of such opportunities,” he said.

Mr Museveni has urged the EAC to strive to solve what he termed “basic yet fundamental challenges” dogging the bloc as it moves towards the tactical areas. He said social transformation was taking place and that this was creating new meaning for the world economy. 

President Museveni said he had held dialogue with the Heads of State of China and Russia among others on investing in infrastructure. He cited some of the initiatives as the upgrade of the Dar-Kigoma, Dar-Isaka roads and the rail lines from Hanga to Rwanda, Kisangani – Juba lines among others.

The chair of the summit said EAC integration was the most progressive and with the brightest future since it aims for a key ultimate stage which is the political integration.

On Kiswahili, the Head of State said he would work towards the establishment of the East African Kiswahili Commission to spur the use of the language as the lingua franca.

Ms Zziwa emphasised the importance of the EAC region to tackle the structural inequalities that hamper integration.

“This can be done by removing all non-tariff barriers; by investing in implementation of the pillars of integration; by advancing and adhering to the enforcement of the decision arrived at and by ensuring that all citizens can live, work and worship in peace,” said Ms Zziwa.