July 27, 2012 (TSR) – The task force negotiating the draft East African monetary union protocol has been urged to use the latest round of negotiations to resolve outstanding issues and to move with greater speed to ensure an agreement is reached before the end of this year, a statement by the bloc’s secretariat said on Monday.
Our people, energized by the benefits out of the Customs Union and the Common Market, are more than ready to embark on reducing the cost of doing business by attaining a monetary union.
“I urge all partner state delegates in the course of these negotiations, to do their utmost to build consensus quickly,” implored Enos Bukuku, the East African Community (EAC) Deputy Secretary General in charge of Planning and Infrastructure at the opening of the six day talks in Arusha, northern Tanzania.
The Deputy Secretary General noted the negotiations, now in their eighth round, could not afford to defer any more matters if the EAC was to achieve its 2012 target for concluding the Monetary Union Protocol.
“Our people, energized by the benefits out of the Customs Union and the Common Market, are more than ready to embark on reducing the cost of doing business by attaining a monetary union,” he said. “I am therefore obliged to remind you that many East Africans within and beyond the region, anxiously await any insights from this meeting on what needs to be done right to make monetary integration work for the EAC.”
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The meeting has been convened to discuss outstanding matters from previous meetings of the high level task force (HLTF) negotiating the draft protocol, as well as to deliberate on Articles 60 – 72 of the same, broadly touching on financial arrangements, integrated financial management system and transitional arrangements.
Bukuku said the draft Articles up for discussion this week are particularly critical because they underpin the integration of the financial sector, of which integration will be a key enabler for the Monetary Union.
The HLTF is comprised of senior officials from the Partner States’ Ministries of Finance, Planning and Economic Development, East African Community Affairs, as well as Central Banks, Capital Markets Authorities, Insurance and Pensions Regulatory Agencies, and National Statistics Offices.
Previous rounds of negotiations deliberated on provisions touching on, among others, the scope of the Monetary Union; macroeconomic policy framework; monetary policy framework, exchange rate policy and exchange rate mechanism; and instruments of monetary control. The negotiations commenced in January 2011. The Monetary Union is the third phase of the EAC integration process before the final step of a political federation.
With its attainment to adopt a single currency, EAC partner states would remove the costs of having to transact in different currencies and the risk of adverse exchange rate movements for traders and travelers alike within the region.
It is envisaged that the Monetary Union will deepen the integration of East African economies and, in doing so, enhance the benefits which can be derived from the EAC Common Market.