Home NewsRegional EAC Monetary Union Taking Too Long to Mature – EALA

EAC Monetary Union Taking Too Long to Mature – EALA

by Daniel Sabiiti
8:08 pm

EALA plenary session at Rwanda Parliament

The East African Legislative Assembly (EALA) has urged the Council of Ministers to fast-track the operationalization of all institutions intended to support the Monetary Union to ease regional integration and especially in trade.

On 30th November 2013, Partner States concluded the Protocol on the Establishment of the East African Community Monetary Union. Articles 21 and 23 of the Protocol empowers the Summit, on the recommendation of the Council, to establish institutions to support the Monetary Union:

These include: Institutions responsible for financial services; for surveillance, compliance and enforcement; for statistics; proper functioning of the Monetary Union; and the East African Monetary Institute.

However, during a debate on the Report of the Committee on Legal, Rules and Privileges on the East African Community Surveillance, Compliance and Enforcement Commission Bill, 2022, MPs were not happy with the current progress.

MPs meeting in Kigali at the EALA 1st meeting, 5th Session of the 4th Assembly held November 2, 2022 showed that none of these has been put in place which adds to already existing setbacks in signing and implementation of earlier agreed on protocols for the EAC customs union and common market.

For instance, in 2018, the EALA passed two bills on the monetary union- the monetary institute bill which was assented to but has not been put in place and the EAC Statistical Bureau Bill but it has not been assented to.

The Momentary union bill is supposed to bring together compliance in micro and macro, monetary and fiscal policies for the EAC- which is critical in forming the EAC Central Bank.

Ambassador Fatuma Ndagiza (Rwanda) said that the EAC is already lagging behind four years on the monetary union schedule (which is a third pillar of integration), ahead of implementing four pillar- the political federation

Ndagiza said the time frame was 2023 but if all goes well it will be 2024 – yet another delay and all know this is a very critical pillar to integration.

“Sorrily, the ball is in your court. You (ministers) have to ensure this institution is created. We want to ask the council of ministers to remind the summit to have this assented to,” Ndangiza said.

MP Aden Omar Abdikadir (Kenya) said the problem is of consensus where EAC is unable to move at the pace it is supposed to because all countries must sit on the same table to say yes to a crucial bill.

“Move us away from this issue of consensus. If four of us have agreed, let’s move with that because this is how the world is making decisions all over and this is how the EU is making its decisions,” Abdikadir stated.

Abdikadir asked the Chairperson (council) to critic this consensus issue, which was put in the treaty when there were only three states and now the EAC is engaging the 7th member which will likely witness more challenges to agree.

Implementation of the monetary union would come with establishing one single EAC currency which would make trade cheaper and remove risks of loss in currency exchange, reduce some non-tariff barriers in the customs service and easy movement and payment of goods and services.

For instance, Tanzania is building largest power plant in the region and this means that other countries can pay using a single currency unit when importing or exporting electricity.

MP Rose Akol Okullu (Uganda) blamed the Council of ministers for frustrating the EALA and said all these discussions are rendered useless and none of the recommendations made is taken serious.

“We have been making very important recommendations for the council to do, and now in the fifth year with just one plenary before we conclude the 4th assembly but we have no report on all the recommendations we made,” Okullu said.

MP Jean Claude Barimuyabo (Rwanda) raised concerns on lack of updates on the EAC Statistical Bureau Bill (passed in November 2018) which has not been assented to, yet the parliament succumbed to pressure of passing it to give way for establishment of the monetary union.

EALA Speaker, Martin Ngoga said that they will demand explanation from the Council on who is blocking bills but also tasked the Counsel to the East African Community (CTC) to address this and come back with answers to concerns of assenting and revisions in the bill (addressing concerns of a partner state), without bring the bill back to the assembly.

Dr. Anthony Kafumbe, the Counsel to the East African Community (CTC) said that they will consult with member states to find out their concerns before the bill is assented to by the council but members asked for specifics on which member state and concerns.

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