East Africa ministers approve single currency
Kampala: The EAC Council of Ministers has approved the Monetary Union protocol, which will be signed by the regional Heads of State to pave way for the process of seeing the region get a single currency.
Although the realisation of this objective will take 10 years, it’s a step towards easing cross-border business and trading of goods and services.
The protocol, whose initial signing was supposed to be in November last year, has been cleared by the Council of Ministers and is ready for signing by the respective Heads of State.
Speaking to Saturday Monitor yesterday, former EAC Secretary General Amanya Mushega said the Monetary Union, will strengthen the region’s currency and enhance trade and business across the member states.
“It is much easier to trade freely if you are assured that the currency you are using for trading is of the same value,” Mushega said.
“This means that when you go to any of the partner states, you will not need to carry dollars to pay your bill.”
Having a single currency will lower transaction costs between member states. This means there will be no need to exchange currencies, no exchange rate commissions and no need to insure against currency fluctuations.
The Executive Director of East African Business Council, Mr Andrew Luzze, said: “Monetary Union will facilitate doing business in the region because we shall be operating on the same fiscal and exchange policy. This means the costs which we have been incurring during conversion, will be no more.”
Manageable?
Although the Private sector has generally endorsed the Monetary Union protocol on account that it will reduce the cost of doing business and ultimately boost trade, the major worry, according to Mr Moses Ogwal, the Private Sector Policy analysts, is whether the partner states will ensure that infrastructures necessary to make the protocol functional, are enforced.
The EAC Deputy Secretary General in charge of Planning and Infrastructure, Dr Enos Bukuku, says that the single currency protocol spells out how Partner States will join the last stage of the EAC, which is the single currency and that the East African currency will be the legal tender in the single currency area.
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