According to the Wall Street Journal, “Heads of state in East Africa on Saturday signed a monetary-union deal, setting the clock on a 10-year timeline for the establishment of a regional single currency.
The agreement, reached at the lakeside resort of Munyonyo in Kampala, came after nearly a decade of talks. Kenya, Uganda, Tanzania and Rwanda will now try to establish institutions—including a regional central bank and a statistics body—to support the single currency.
The deal marks an important touchstone in the region’s transition from a collection of conflict zones to one of the world’s most promising destinations for investment.
‘East African community is now fully embarked on enormous, ambitious and transformational initiatives for our people,’ said Uhuru Kenyatta, Kenya’s President and new head of the regional block. ‘The promise of prosperity and economic development hinges on soundness of our integration.’”
According to Reuters, ”In the run-up to achieving a common currency, the East African Community (EAC) nations aim to harmonize monetary and fiscal policies and establish a common central bank. Kenya, Uganda, Tanzania and Rwanda already present their budgets simultaneously every June.
The plan by the region of about 135 million people, a new frontier for oil and gas exploration, is also meant to draw foreign investment and wean EAC countries off external aid.
‘The promise of economic development and prosperity hinges on our integration,’ said Kenya’s President Uhuru Kenyatta.
‘Businesses will find more freedom to trade and invest more widely, and foreign investors will find additional, irresistible reasons to pitch tent in our region,’ said Kenyatta, leader of the biggest economy in east Africa.”
History of the East African Community (EAC)
The East African Community (EAC) is an intergovernmental organization comprising five countries in the African Great Lakes region in eastern Africa: Burundi, Kenya, Rwanda, Tanzania and Uganda. The organization was originally founded in 1967, collapsed in 1977, and was officially revived on 7 July 2000. In 2008, after negotiations with the Southern Africa Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA), the EAC agreed to an expanded free trade area including the member states of all three. The EAC is an integral part of the African Economic Community.