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Uganda Flag and 50,000 Currency Note
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East African Community heads of state will at the end of this week sign a
monetary union agreement, paving way for the creation of a single currency.
President Uhuru Kenyatta on Tuesday said that the creation of the East
African Community Monetary Union is expected to strengthen regional
competition, address costs of financial transactions in the region and reduce
risks.
“The people of East Africa are interacting at such as rising rate and
exchanging information, goods and services in such growing volumes, that our
borders have become mere formalities,” said President Kenyatta, while
addressing the third meeting of the second session of the third East African
Legislative Assembly in Nairobi.
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| Rwanda Flag and 5,000 Currency Note |
President Kenyatta said that a single monetary union would also reduce the
costs of transacting business by eliminating use of different currencies across
the five countries.
The signing of the agreement also comes at a time when trade volumes between
the Kenya, Tanzania, Uganda, Rwanda and Burundi have been on an upward trend.
According to the Society of International Development’s latest state of East
Africa report, the value of intra-regional trade was valued at almost $5.0
billion in 2011, an increase of under $1.0 billion from $4.1 billion in 2010.
Exports within the region accounted for 21 per cent of total exports in 2011
while the share of imports from the region has remained at 7 per cent of East
Africa’s total imports between 2009 and 2011.
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Foreign direct investment inflows stood at $3.9 billion in 2012, a $1.8
billion increase from $2.6 billion in 2011 with 90 per cent or a combined total
inflow of $3.4 billion going to Uganda and Tanzania.
Rwanda FDI increase by $54 million in while Kenya’s shrank by $76 million
and the the extractives sector overshadowed others in investments investments
into East Africa.
International companies such as Tullow, Ophir Energy, Coca Cola, General
Electric, Airtel, Vodaphone, Diageo, SABMiller and IBM are doing business across
the region and indigenous banks such as CRDB, KCB Group, NIC, Equity and
Diamond Trust have become regional lenders.
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Kenyan Flag and 1,000 Currency Note
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The signing of the agreement also comes at a time when Tanzania has
complained of being isolated by Kenya, Uganda and Rwanda on infrastructure
projects.
Tanzania has however been accused of being reluctant on the implementation
of key policies that are expected to see the free movement of people and goods
and services in the region.
The agreement contains benchmarks such as gross domestic product ratios,
debt ceilings, inflation rates and foreign reserve floors which each of the
countries must meet and maintain before the single currency is launched.
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Tanzanian Flag and 10,000 Currency Note
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The regional leaders are expected to sign the East African Community
Monetary Union Protocol during the Heads of State Summit, which is the first
step to adopting a single currency.
“In many ways, the Monetary Union is the logical culmination of integration
efforts,” said President Kenyatta.
The signing of the protocol would make way for the adoption of a single
currency within a 10-year period.
The signing of the agreement is also coinciding with the ground breaking of
a standard gauge railway that will link Mombasa to Kampala and Kigali.
Adapted from The East AFrican
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