Tanzania presidential candidates should speak about the EAC

Monday September 28 2020

 

By Richard Mshomba

Elections in Tanzania are approaching very quickly – they will be on Wednesday, October 20, 2020. As expected, presidential candidates are making many promises about the economy, provision of social services, personal freedoms, ending corruption, governance, and many other domestic issues.

These are important topics for debate and discussion. However, presidential candidates should also provide their views and vision regarding the East African Community (EAC) of which Tanzania is a founding and key member.

In late 2013, the five leaders of the EAC (South Sudan was not yet a member of the EAC) signed a protocol to establish a monetary union by 2023. The ultimate goal of the EAC is to form a political federation. While it is highly unlikely that an East African Monetary Union (Eamu) would be established by 2023, or a political federation would be achieved in the near future, it is imperative that presidential candidates talk publicly about their aspirations and vision about the EAC.

How committed are they, for example, to the protocol to establish a common market that was signed in 2009 and came into force on July 1, 2010? At this level of integration, not only does the regional bloc agree to have common external tariffs and free movement of goods within the region; it also agrees to allow free movement of capital and labor.

Yet, that seems to be an agreement just on paper. It is important to hear presidential candidates’ views on how this protocol is implemented in Tanzania.

There is an apparent disconnect in the debate over regional economic integration in East Africa. Even though regional economic integration is a regular topic when the heads of state meet, the topic does not receive much attention in local or national politics, except when there are skirmishes between member countries.

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This happened recently between Kenya and Tanzania stemming from the diametrically different approaches they took in response to the corona virus pandemic.

Parliamentary and even presidential candidates often face off without any mention of aspirations for economic integration. Politicians act as if the benefits of economic integration are either so obvious or its impact so far removed from their constituencies that it does not require much discussion. Whatever the case, they see no real need to discuss it at political rallies.

For presidential candidates, and parliamentary candidates, for that matter, it is not too late to speak about the EAC. Candidates should speak with clarity about what Tanzania’s position ought to be regarding deeper integration. Since a monetary union is scheduled to happen while they are in office, if elected, they need to state their positions about it. Do they think the potential benefits of a monetary union outweigh the costs?

The most important benefit of a single regional currency is reduced transaction costs. Hundreds of citizens of the EAC countries cross each other’s borders every day for business, leisure, education, and medical services.

Every year, thousands of tourists from the rest of the world visit multiple countries in the EAC on the same trip. The costs of a monetary union include (a) losing control of monetary policy; and (b) tensions between members due to misalignments of business cycles of countries in the union.

Forming a monetary union, let alone a political federation, represents a surrender of national sovereignty to the EAC. It is a decision that should be made by a referendum if democratic processes are to be valued. The timetable towards an EAC monetary union does not include a call for a referendum.

However, this does not prevent presidential candidates from stating their position with respect to the process for attaining a monetary union Holding a referendum would be a mechanism through which the public can be informed about, and debate, the advantages and disadvantages of joining a monetary union.

Moreover, a monetary union cannot happen as a surprise. When the new currency is introduced, it must be made crystal clear to the public how soon the national currencies will become obsolete. When the European Union introduced the euro in 1999, a transition period of 3 years was given before national currencies were eliminated.

In the remaining four weeks of campaigning, presidential candidates should make clear their positions about the EAC. They should let the public know their aspiration and vision and their commitment to democratic processes in moving towards deeper integration.

Richard Mshomba is Professor of Economics at La Salle University, Philadelphia, PA 19141, U.S.A. (mshomba@lasalle.edu). He is the author of Economic Integration in Africa: The East African Community in Comparative Perspective (Cambridge University Press, 2017).