EAC approves monetary union deal

By Cyprian Musoke, Steven Candia and David Lumu

East African countries will be able to trade in one common currency by 2015, following the signing of the monetary union protocol by the five heads of state at the EAC summit that ended on Saturday.

Presidents Yoweri Museveni of Uganda, Kenya’s Uhuru Kenyatta, Tanzania’s Jakaya Kikwete, Rwanda’s Paul Kagame and Burundi’s Pierre Nkurunziza signed the monetary union protocol at the Speke Resort Munyonyo in Kampala Saturday afternoon.

The ratification of the monetary union, the third pillar of integration is set for July 2014 to pave way for the use of a common currency.

This will eventually spread to include South Sudan and Somalia if they are admitted.

The admission of South Sudan is set for April 2014, while a committee has been set up to consider Somalia’s application.

In a joint statement read by the new EAC chairman Kenyatta, the heads said the region was firmly on the road to full attainment of their people’s collective aspirations.

“The signing of the monetary union protocol is the logical culmination of our integration efforts. We now have a framework required to unlock the promise of integration. The Union will eliminate the costs attendant to juggling different currencies, thereby reducing transaction costs.”

“Moreover, currency volatility and fluctuation will be minimised. Business will find more freedom to trade and invest more widely, and foreign investors will find additional, irresistible reasons to pitch tent in our region. Such advantages will no doubt result in increased investment and further transformation of East Africa,” Uhuru said.

He said that ever since establishment of the customs union and the common market, intra-EAC trade has continued to increase and the monetary union will catalyse this further.

In his speech after handing over the chairmanship to Kenya, President Museveni said that since its revival in 1999, a lot of progress has been realised with the only weakness remaining with implementation and non-tariff barriers.

He said that the time it takes to clear a container from Mombasa to Kampala had reduced from 18 to three days and Mombasa to Kigali from 24 to four days.

The only remaining danger, he added, is contempt of African integration process by western powers.

“They attacked Libya and refused African leaders from landing in Libya. You know what is now happening in Libya. Then there is Kenya’s case before the International Criminal Court. I congratulate the people of Kenya for voting against this hegemonism and meddling in their internal affairs.”

That East Africa has achieved growth is not by surprise, since it has always had the potential, and all it needed was tap into its common market, marshal technology and capital and develop the necessary infrastructure and security.

Museveni said he was making efforts to convince Russians and Chinese about an East African infrastructure project. “I have written to them about electricity, the railway and I am glad Kenya has launched the railway project,” he said.

He urged countries to operationalize the vision that African nationalists Julius Nyerere and Kwame Nkrumah had. “Had they attained unity, a lot of disruption would have been avoided. Amin would not have taken power. Genocide would have been averted in Rwanda and Burundi because we would have intervened and stopped it. Eventually we managed to back Kagame to stop it, but over 40,000 corpses had landed on the shores of Lake Victoria,” he said.

The recent election violence in Kenya, he regretted, would also have been averted.

The secretary general Dr. Richard Sezibera said that the single customs territory will become a reality in January 2014. He added that internationally recognised passports are in the pipeline. Additionally, East African identity cards, work permits and a single tourist visa are due next year.

The monetary union, he added, will create macro-economic stability and discipline, and that central bank governors in the region had instituted an East African payment system which will reduce the cost of doing business down.

At yesterday’s summit, two judges were sworn in to the East African Court of Justice — Dr. Emmanuel Ugirashebuja from Rwanda and Monica Mugenyi from Uganda — to replace Lady Justice Stell Arach who is retiring.

After the signing of the protocol Museveni addressed a rally at the Kololo ceremonial grounds where he emphasized the importance of a large market and thus the need for federation.

He said the coming together of the member states would bring numerous benefits, such as development and wealth, to Uganda and the region.

But he pointed out the need for proper infrastructure if the market is to function well. He said it is in light of that, that Uganda and Kenya have embarked on reviving rail transport.

“We are doing this so that we can start moving things at a low cost from Kenya to here,” Museveni said.

The mood at Kololo was celebratory as they were treated to entertainment by a dance troupe and pupils of two primary schools, with the DJ playing popular contemporary East African tunes.

Under the VIP tents, diplomats, government officials, religious and cultural leaders waited patiently to be addressed by the presidents about the new developments.