The Intergovernmental Committee of Experts (ICE) meeting has advised the East African Community partner states to promote mobility of people, goods and services and eliminate socio-economic differences before adopting a common currency.
The advice given in Dar es Salaam yesterday underlined the importance of the monetary union to the East African Community. The said regional trade was bound to expand due to lower costs, thus providing more employment opportunities and increasing individual and regional economies’ revenues.
Dr Albert Musisi Commissioner for Economic Policy in Uganda’s Ministry of Finance said: “If we move carefully and understand what we need to do the community will benefit from the common currency.”
“There are a number of challenges that must be taken into consideration. The differences in debts may be the major factor that might limit implementation of the plan…I hope, we will conduct analysis and put a limit on debts which will be adhered to by members before joining the Union, an idea that will eliminate the burden to member states,” he said.
Andrew Mold who is a senior economist and Head of Macroeconomic and Social Policy Analysis Cluster in Rwanda said the East African community must first learn from the crisis that is facing the European Union before implementing the plan.
“We must think outside the box,” said Mold, who also works with the sub-regional Office for Eastern Africa. “As we advance to implementation of the monetary union, we also have to address asymmetric shocks between countries so that we can avoid what happened in Europe,” he added.
Aloys Rusagara, Head of Transport Policy and Planning from Mombasa Kenya Permanent Secretariat of the Transit Transport Co-ordination Authority of the Northern Corridor said for effective monetary union, EAC governments must schedule what must be done first instead of worrying about the crisis in the European Union.
He said: “We are supposed to act on micro-economic activities as a means of having a controlled rate of inflation.”
The EAC was urged not to be scared by the European Monetary Union weaknesses but to learn from the monetary union in Oman and the previous East African Monetary union which was very strong during the colonial period.
Countries in the East African community have adopted the export-led growth model to enhance economic development, and are in the process of implementing strategies for expanding their shares of the global export trade in the traditional export destinations as well as with each other.
Strategies to increase intra-regional trade include elimination of trade barriers through regional integration.