East African Community leaders on Saturday signed the Monetary Union Protocol which is intended to result in a single currency in 10 years’ time.
The signing ceremony held at Speke Resort Munyonyo in Uganda was witnessed by Members of the East Africa Legislative Assembly, diplomats and high ranking government officials of member states.
President Uhuru Kenyatta was earlier installed as chairman of the EAC, a major regional role that will see him become the focal point in discussing East Africa’s response to serious challenges ranging from hunger to terrorism. (READ: Uhuru to take up EAC reins)
President Kenyatta joined host President Yoweri Museveni, Rwandan President Paul Kagame, Tanzanian President Jakaya Kikwete and Burundi President Pierre Nkurunziza first at a resort on the shores of Lake Victoria for formal EAC talks.
President Kenyatta had also held separate one-on-one bilateral talks with President Kikwete, where the region’s infrastructure drive as a pillar of economic growth was discussed.
The protocol will provide for a wide scope of co-operation in monetary and financial sectors among EAC members.
Under the protocol, EAC states are expected to surrender monetary and exchange rates policies to one authority leading to a single currency regime within the region.
The protocol will be implemented over a ten year period, subsequently leading to creation of a regional central bank whose mandate is to stabilise financial prices as well as monitoring, surveillance and enforcing compliance of all other macro finance matters. (READ: Tread carefully on single currency idea)
President Kenyatta told the launch the monetary union will accelerate trade growth within the region.
He said the union will eliminate the costs attendant to juggling different currencies thereby reducing transaction costs.
“Businesses will find more freedom to trade and invest more widely, and foreign investors will find additional, irresistible reasons to pitch tent in our region. Such advantages will no doubt result in increased investment and further transformation of East Africa,” said President Kenyatta.
President Kenyatta urged member states to eliminate all the remaining barriers to free movement of people, goods and services.
“Barriers to trade in particular assail the spirit of the Common Market, Customs Union and the Monetary Union,” said President Kenyatta, calling for the removal of all obstructions to the growth of the community, stressing the need to allow free movement of people, businesses and capital within the community to provide opportunities for generating prosperity.
He also called on investors and other businesspersons to enhance their participation and commitment to empowering economic growth in the community.
“Businesses and traders in the small and micro-enterprises sector need to be enabled to trade in the regional arena. I commend the work done in this regard, especially through regional exhibition,” President Kenyatta said.
The President also said the envisioned integration will work as intended when underpinned by a sound infrastructure system, stressing that development of infrastructure connecting member states was key to the integration process.
The President commended the council of ministers and the EAC secretariat led by the Secretary General Ambassador Dr. Richard Sezibera for their excellent work in entrenching the integration process.