Central Bank Governors of the East African Community (EAC) have noted that there have been delays in realising targets set out in the East African Monetary Union (EAMU) road map and that there are several challenges that could further impede the full implementation of EAMU protocol.
The Governors, who met in Kampala at the 22nd ordinary meeting of the EAC Monetary Affairs Committee (MAC) chaired by Prof. Emmanuel Tumusiime-Mutebile, Governor Bank of Uganda, pledged to collaborate with stakeholders in the EAC integration process to fast-track pending activities of the EAMU road map.
The meeting was attended by Central Bank Governors of the 6 EAC member states (Kenya, Tanzania, Rwanda, Burundi, South Sudan and Uganda) and the Secretary General of the EAC Secretariat.
The Governors noted that significant progress has already been made towards the operationalization of the EAMU Protocol.
“Partner States’ Central Banks have made strides on harmonization of: monetary policy frameworks, exchange rate policies, rules and practices governing bank supervision, financial accounting principles, as well as payment systems.
“A number of national laws are also being harmonised. In April 2018, the East African Legislative Assembly (EALA) enacted the bill establishing the East African Monetary Institute (EAMI). The EAMI bill now awaits assent by the EAC Heads of State,” noted a Communiqué that was issued after the meeting.
It said that “Notwithstanding the above, Governors noted that there have been delays in realising targets set out in the EAMU road map and that there are several challenges that could further impede the full implementation of EAMU protocol.
“Governors therefore pledged to collaborate with stakeholders in the EAC integration process to fast track pending activities of the EAMU road map.”
The Governors that were in Kampala were, Mr. Vénuste Ndikumwenayo of Burundi, Dr. Patrick Njoroge of Kenya, Dr. Monique Nsanzabaganwa of Rwanda, Dier Tong Ngor of South Sudan, Prof. Emmanuel
Tumusiime Mutebile of Uganda and Prof. Florens Luoga Central Bank Governor of Tanzania.
According to the Communiqué, they noted the recent global developments including the escalating trade tensions, tightening financial conditions, strengthening of the US Dollar and rising commodity prices and their potential impact on the EAC economies.
“Normalization of monetary policies in some advance economies and the associated rise in interest rates, coupled with escalating trade tensions pose risks for macroeconomic stability as well as overall economic growth in the region.
Partner States’ Central Banks reiterated the need to remain vigilant in identifying and building resilience to shocks arising from the recent global developments.
They also underscored their commitment to enhancing coordination of fiscal and monetary policies to boost our capacity and preparedness to withstand economic shocks.
BY PAUL TENTENA