EALA adopts Monetary Union report
Posted Friday, November 1 2013 at 02:00
Kampala- The East African Legislative Assembly (EALA) has adopted the Monetary Union report and called for its haste full implementation.
This was at the on-going EALA secession in Bujumbura yesterday on the Consultative Workshop on the East African Monetary Union (EAMU).
While the assembly maintained that the EAMU was a defining moment for the integration process, it reiterated the need for the region to move with haste to fully implement the Customs Union and the Common Market Protocols.
“Full implementation of the two Pillars, the Assembly ascertains, will pave way for entry of the single currency,” an EALA member said.
The report presented by Ms Angela Kizigha, chairperson of the CTI, said once in place, the EAMU would promote and sustain a zone of sound monetary policy and prudent fiscal policies to reinforce EAC’s monetary policies.
The roadmap of the EAMU provides for its implementation over a 10-year period, time within which, the single currency shall be realised.
Exchange rate policy
At the same time, the exchange rate policy shall have a convergence phase and the conversion of exchange rates shall be formulated and irrevocably fixed by the Council of Ministers.
Ideally, the pre-requisites for the EAMU pre-suppose the implementation of the Customs Union and the Common Market, integration of financial systems, harmonisation and co-ordination of statistics and macro-economic policy.
Other areas to note
Other areas include the need to establish a mechanism for surveillance, compliance and enforcement, establishing an inflation ceiling of 8 per cent and indicative criteria, including fiscal deficit ceiling of 6 per cent.
The proposed institutional framework under the EAMU envisages the establishment of the East African Monetary Institute (EAMI), East African Central Bank as well as a number of institutions dealing with statistics, finance, surveillance and compliance.
Mr James Ndahiro the chairperson Rwanda Stock Exchange, remarked that it was important for the protocol to be comprehensive saying the committee responsible needs to meet with policy leaders.
“The Committee responsible for finalisation of the Monetary Union protocol needs to meet and liaise closely with the policy leaders including the Ministers and the Economists in order to ensure a common position on sticky matters,” Mr Ndahiro, said.