Regional
Central banks raise doubts on East Africa single currency by 2024
![image](webadmin/images/currency.jpg-20220310094451000000.jpg)
East
African central banks have cast a shadow of doubt over the proposed
implementation of a single currency regime by the year 2024, citing delays by
member countries in realising targets set out in the Monetary Union roadmap.
The
single currency regime is expected to eliminate transaction costs of exchanging
currencies and remove exchange rate volatility in cross-border trading
activities.
The
banking regulators, through the East African Community Monetary Affairs
Committee (MAC), noted that while significant progress has been made
towards the realisation of a monetary union there are several challenges
which could still impede the timely implementation of its protocol.
In a
virtual meeting held on March 4, the Committee, chaired by Kenyan
Central Bank governor Patrick Njoroge, singled out
the cross-border payment systems, arguing that there is still more
progress which needs to be done on this front.
“The
Committee noted that there have been delays in realising targets set out in the
EAMU roadmap and that there are several challenges that could further impede
the timely implementation of EAMU protocol,” according to a communique released
on Monday.
“Therefore,
the Committee pledged to work with the EAC Secretariat and other stakeholders
in the EAC integration process to fast-track pending activities of the EAMU
roadmap.”
The
committee said that Partner States’ Central Banks have made significant
strides towards implementation of the Monetary Union, including the creation of
key institutions of the of the East African Monetary Union (EAMU), and
harmonisation of monetary and exchange rate policies.
Other
achievements, according to the committee, include harmonisation of regulatory
frameworks, implementation of measures to strengthen regional payments systems,
and enhancement of cybersecurity frameworks.
In 2019, the plan to have a single East African currency in 2024 collapsed after the EAC Council of Ministers, the central decision-making and governing organ of the EAC, resolved that this deadline is not attainable, sending member countries back to the drawing board.
As a
result, the member states tasked the EAC Secretariat to constitute a team of
regional experts to review the roadmap and come up with new timelines.
Last
year, EAC Secretariat Secretary-General Peter Mathuki told The
EastAfrican that consultations on the revised timelines with the
partner states are ongoing with the final proposal expected to be tabled before
the Council of Ministers.
“The
consultations with the partner states on the revised roadmap are ongoing in
which we shall form a proposal to present before the Sectoral Council of
Ministers to approve or confirm the roadmap before the end of this year
(2021),” said Dr Mathuki.
The
Protocol for the establishment of the EAMU was signed by the heads of state in
Kampala on November 30, 2013, setting up a 10-year roadmap for attaining a
single currency regime in 2024, the third pillar of regional integration after
the Customs Union and the Common market.
Source:
www.theeastafrican.co.ke