New twist for EAC monetary body timeline

What you need to know:

  • The EAC has set a new deadline for the establishment of its monetary authority, which will spearhead the single currency initiative, with Tanzania and other member nations competing to host it

Arusha. The East African Community (EAC) has issued a new date for the setting up of its monetary body that will spearhead  the single currency project.

This time around the regional organisation said the East African Monetary Institute (EAMI) is to be established this year.

The institute will be constituted this year as several EAC partner states, including Tanzania, are jostling to host the body.

The other countries which have shown interest to host the institution are Kenya and Uganda which, with Tanzania, are founder EAC members.

EAMI will be tasked to pave the way for the single currency economy in the seven nation economic bloc.

The region now plans to have a single  currency regime in four year’s time, as revealed by the EAC boss, Dr Peter Mathuki.

He told the EAC staff during a retreat in Kenya last week that the process to establish EAMI will finally kick off this year.

Although the single currency is set for adoption in four years, EAMI will be in place this year “to allow us to harmonise member states’ fiscal and monetary policies.”

“Then in about three years, we will have a common currency in place,” he said. EAMI would later be transformed into the East African Central Bank.

The single currency is one of the projects earmarked for implementation under the East African Monetary Union Protocol.

It is aimed to ease business and movement of persons within the region as envisioned in the Common Market Protocol.

Impeccable sources intimated to The Citizen that at one time Tanzania had been cleared to host the centre after meeting the criteria.

This followed a series of high level meetings but the same sources hinted later that Tanzania faced stiff opposition from Kenya and Uganda.

Ideally, the EAC institutions are up for grabs for hosting by any partner state given the readiness of a country in question.

However, other criteria include the basic facilities available and whether such a country had more EAC bodies concentrated than required.

Tanzania is the headquarters of the EAC with the key organs; the Secretariat, the East African Legislative Assembly (Eala) and the East African Court of Justice (EACJ). Kenya has one EAC institution; the Kisumu-based Lake Victoria Basin Commission (LVBC)) while Uganda has four of them.

These are the Inter University Council of East Africa (IUCEA), Lake Victoria Fisheries Organisation (LVFO) and the East African Development Bank (EADB).

Another EAC institution based in Uganda is Civil Aviation Safety and Security Oversight Agency (Cassoa) which operates from Entebbe.

Burundi and Rwanda have one EAC body each; being the East African Health Research Commission and the EA Science and Technology Commission respectively.

No EAC body is located in both South Sudan and DR Congo which joined the Community in 2016 and 2022 respectively.

According to Dr Mathuki, the decision as to where the proposed monetary institute would be located would be made in due course.

It has been tasked to the EAC Council of Ministers, an authoritative organ of the Community, answerable only to the Heads of State.

“The Council of Ministers is expected to plan on the location of the EAMI this year,” Dr Mathuki said, saying the decision was key to kick start the process.

New timelines for the proposed monetary institute in the region have resurfaced two months after the EAC gave 2031 as the tentative date for launching a single currency economy.

The new date will, however, be subject to approval by the EAC Council of Ministers during its sitting earlier scheduled for this month.

The decision to this effect was made by the EA Finance ministers during one of their routine meetings held in Arusha in October last year.

Adoption of the single currency is well articulated in the East African Monetary Union(Eamu) protocol signed in 2013.

“Technical experts have set a new date for the single currency to be 2031,” said Dr Pantaleo Kessy, a monetary expert when he spoke with journalists here recently.

The single currency project may be subjected to a further delay because of poor implementation of the Customs Union and Common Market protocols.