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The East African Community will move to a single currency by June next year, according to EAC Secretary General, Mr Richard Sezibera, making it the second regional bloc to adopt single currency after the European Union.

The region, Mr Sezibera said, was halfway through the negotiation process, and that the High Level Task Force was doing all it can to accelerate the adoption of a monetary union.

"We are halfway in the negotiations for the protocol and the talks on the remaining items will be accelerated in the first half of 2012," Mr Sezibera said.

The Secretary General said the single currency would increase the region's global competitiveness, and stabilise currency fluctuations.

"The monetary union accompanies by economic and financial integration, fiscal discipline and macro-economic convergence criteria will enable East Africa to compete more effectively against other economic blocs," Mr Sezibera said.


Abdi Latif Dahir, Daily Nations

Fears Hold Up Plan for 2012 Single Currency in Region

The road to a single currency for the East African Community is still long if talks at the Heads of State and Government Summit that closed last Wednesday in Bujumbura, Burundi are anything to go by.
The five EAC member countries are yet to harmonise their economic policies and institutions, which is crucial for a monetary union.

The regional integration calendar set 2012 as the deadline for the union.
A report adopted at the summit says transition from a common market -- where people are free to trade, move and own property in the region -- to a monetary union requires a major transformation.

This would require making the common market an economic union as a foundation for harmonising inflation, state debt, foreign currency policy, as well as in key productive sectors.

Expert input
The report on fears and problems for an East Africa federation prepared by experts says it is only on such a platform that a stable monetary union can be constructed.

"A monetary union with neither macro-economic nor sectoral policies convergence is a risky venture that may jeopardise the common market and the eventual political federation," the report says.

It calls for a politically managed transition of the East Africa Commission to an East African Economic Union Authority.
It further argues that the East Africa Monetary Authority should lead to an E A Central Bank. The report calls for a unified federal treasury.
The heads of state and government directed the East African Community secretariat to produce a road-map for establishing and strengthening the institutions identified by the experts as critical to a monetary union.

The heads of state of Kenya, Tanzania, Uganda, Rwanda and Burundi held their 13th ordinary summit on the region's integration process.
Sudan's request to join the East African Community was rejected following opposition from Tanzania and Uganda. Rwanda, Kenya and Burundi did not object.

Read more: http://allafrica.com/stories/201112050119.html