While the benefits of lower transactions costs from a common currency may be significant, countries will also lose the ability to use monetary policy to respond to. Establishing a monetary institute for the region as an. Burundi, kenya, rwanda, south sudan, tanzania, and uganda. Pdf a common currency for the east african community. Treaty for the establishment of the east african community, as amended 2008 pdf, 539 kb. The east african community partner states aim to establish a monetary union by 2023. African union handbook, which is an invaluable resource for those who work both with and within the african union. Pdf monetary union for the development process in the. Imf staff country reports international monetary fund. This paper empirically examines the suitability of monetary union in east african community members namely, burundi, kenya, rwanda, tanzania and uganda, on the basis of business cycle synchronization. The east african monetary union protocol 2012 is yet to be signed and the date for eamu actual implementation of the common currency is uncertain. East african trade bloc approves monetary union deal reuters. Design and implementation of a common currency area in the. The mission is part of the afe east african community eac collaboration program that aims to assist eac partner states achieve the fiscal data requirements associated with the east african monetary union protocol.
The mission strongly welcomes the recent establishment of a formal interagency gfs technical working group and the development of a detailed roadmap based on the. Currently the intention is to sign the east african monetary union protocol 2012. After almost two years of negotiations, the five east african community countries appeared to be reaching agreement on how an east african monetary union will be formed and it was expected that a protocol would be approved at the eac heads of state summit at the end of november. The objective of the study is to assess the importance and similarity of the interest rate channel for the eac countries. East africa economic outlook 2019 african development bank. Protocol on the establishment of the east african customs union.
East african community monetary union eamu the eamu is the third pillar of the eac integration process and it was scheduled for implementation in 2015. The eac member states signed the protocol on the establishment of the east african community monetary. The operationalization of the common market started in 2010. The major benefits of a monetary union are the reduction in transaction costs, economies of international reserves, the elimination of exchange rate risk and regionwide. The heads of state of five east african countries signed a memorandum for a monetary union in ugandas capital kampala on saturday. Protocol on the establishment of the eac customs union 2005, countries agreed to eliminate. As advanced by the optimum currency area theory, countries seeking to enter into a monetary union should be as similar as possible to reduce their susceptibility to adverse economic shocks. Membership criteria of the european and the east african. The east african community eac has fasttracked its plans to create a single currency for the five countries making up the region, and hopes to conclude negotiations on a monetary union protocol by the end of 2012. The east african community eac has failed to meet its 2012 target of agreeing on the formation of a monetary union. The east african court of justice civil society workshop on the role of the court in the east african community integration hasofficially been opened by the minster of east african community affairs uganda in kampala at imperial royale hotel. Pdf the role of the african union in continental peace and.
Africa have started to seriously consider monetary union, a few of them even setting tentative time tables for the process. The monetary union protocol is the third pillar of the eac regional integration agenda after the customs union and the common market protocols, with political federation being the final pillar. Introduction analysis of the east african monetary union institute of. The five east african community eac countries on november 30th signed a protocol to establish a monetary union, in a first step towards creating a single currency. Such a union would call for the creation of a new unified currency, similar to the euro. Progress in regional integration in east africa varies widely across these three recs.
The eac is working towards establishing a political federation of the east african states. Eac monetary union negotiations began in january 2011 and are expected to conclude in 2012. The past year has seen significant progress toward. Protocol on the establishment of the african monetary fund.
Eac discusses harmonization of fiscal, budgetary frameworks the east african community needs to build its capacity to produce robust statistics as well as create a credible surveillance and enforcement mechanism to underpin its transition to a monetary union, a workshop on harmonizing fiscal and budgetary frameworks today heard in arusha. On behalf of the african union heads of state and government, it is my pleasure to introduce the 2019 edition of the. The east african monetary union protocol signed in 20 stresses the need for convergence of macroeconomic. Jun 09, 2018 on november 30, 20, the east african heads of state met in kampala uganda and approved the protocol for the creation of a common currency regime. For example, the revived east african community eac1 is targeting monetary union and ultimately a federation. Antidumping measures eac customs management regulations antidumping measures. To achieve these objectives, the key building blocks are the customs union, common market, monetary union and ultimately the political federation. This is in line with articles 52, 82 and 151 of the treaty for the establishment of the east african community, whose goal is the eventual establishment of a political federation. The mission is part of the afeeast african community eac collaboration program that aims to assist eac partner states achieve the fiscal data requirements associated with the east african monetary union protocol. In late 20 the east african community eac countries burundi, kenya, rwanda, tanzania. East african community customs union implications and benefits of the eac customs union what is a customs union in the theory of economic integration, a customs union is supposed to be the third stage of integration after a preferential trade area and a free trade area. East african community eac close afrika mashariki road p. This is relevant to the region as differences in transmission mechanisms can generate asymmetric behavior between monetary union partners and widen existing cyclical variation.
Since the protocol provides for the east african central bank eacb to be independent of the governments, have 1. The protocol will pave the way for the transition to eamu over the course of the next 10 years and the complementary legal, institutional and economic reforms. Protocol on the establishment of the east african community. Protocol on the establishment of the east african monetary union. The eac has a number of established organs that are similar to those of eu, namely the council of ministers, east african. Towards a common currency in the eastern african community. South sudan and the east african monetary union south sudans accession into the east african community signals a strong commitment to regional integration.
The leaders of five east african countries signed a protocol on saturday laying the groundwork for a monetary union within 10 years that they expect will expand regional trade. The east african customs union was successfully launched in 2005, followed by the establishment of the common market in 2010 and implementation of the east african monetary union protocol in 2012. On november 30, 20, the east african heads of state met in kampala uganda and approved the protocol for the creation of a common currency regime. It first outlines potential economic benefits and costs of a monetary union, and then discusses political and institutional preconditions. Eac monetary union protocol cooperation east african community. A full monetary union involves a single currency and. Comesa is also work ing toward a monetary union by 2025, but prog. Benefits of eac customs union east african community. The protocol providing the legal basis for the eacs transformation into a monetary and fiscal union was signed in 20. The first regional integration milestone, the eac customs union, was successfully launched in 2005, followed by the establishment of the common market in 2010 and implementation of the east african monetary union protocol in 2012. The road to monetary union in east africa share this blog post on 30 november, the heads of state of the partner states of the east african community burundi, kenya, rwanda, tanzania and uganda met in kampala to approve the protocol for the establishment of an east african monetary union.
The protocol sets a framework for adoption of a single regional currency and establishment of an independent east african central bank, whose mandate is to. This has not happened yet but all eac member states have ratified the protocol for the establishment of the eamu with the process of establishing four institutions to underpin the eamu being. The east african procurement forum recommends to the east african community secretariat to expedite the approval of the harmonized east african public procurement policy and legislation through its structures in accordance with the provisions of the east african common market protocol and the east african monetary union. Paul kagame, the president of rwanda, is the eacs chairman. The east african community eac is an intergovernmental organisation composed of six countries in the african great lakes region in eastern africa. Job opportunity at east african community eac programme. The heads of state of the east african community signed a protocol on the establishment of the east african community monetary union on 30th november 20. Currently the intention is to sign the east african monetary union protocol 2012, while the date for actual implementation of the common currency is uncertain. The customs union was formally completed in 2010, and common market protocol was signed in 2009. However, the treaty for the establishment of the east african community provides that a customs union shall be the first.
Pdf kenya, tanzania and uganda signed the treaty for the. The eamu protocol was adopted in accordance with the eac treaty and signed on 30th november 20. The african monetary union amu is the proposed creation of an economic and monetary union for the countries of the african union, administered by the african central bank. The organisation was founded in 1967, collapsed in 1977, and was revived on 7 july 2000. The process of east african community eac integration has continued to gather momentum, following the establishment of the customs union and the common market in 2005 and 2010 respectively, and the next phase is the eac monetary union. The mission strongly welcomes the recent establishment of a formal interagency gfs technical working group and the development of a detailed roadmap based on the eac fiscal data. Task force to advance the east african monetary union. Citeseerx document details isaac councill, lee giles, pradeep teregowda. Towards a common currency in the east african communityeac. Dec 01, 20 the heads of state of five east african countries signed a memorandum for a monetary union in ugandas capital kampala on saturday. Continental peace and security governance 157 india quarterly, 66, 2 2010. The eac started negotiating a protocol to establish the east african monetary union eamu in january 2011. Nov 30, 20 the leaders of five east african countries signed a protocol on saturday laying the groundwork for a monetary union within 10 years that they expect will expand regional trade.
However, several regional monetary union projects are planned such as ecowas, comesa, sadc and eac and a common currency for africa is a longterm goal of the african union. The eac started a fullyfledged customs union in january, 2010 and implementation of the common market in july, 2010 while the east african monetary union protocol eamu was signed in november 20. Task force to advance the east african monetary union the east african community strives to achieve deepened economic integration through an east african monetary union eamu. Eacj civil society workshop officially opens in kampala. Mujuni lawrence, director ministry of east african affairs uganda. It is the strategic framework for delivering on africas goal for inclusive and sustainable development and is a concrete manifestation of the panafrican drive for unity, selfdetermination, freedom, progress and collective prosperity pursued under panafricanism and african.
An assessment of the trade effects of the east african. Pdf the role of the african union in continental peace. Eapf materials east african procurement forum 2017. The eac is approaching the highest stage, having ratified the protocol for a monetary union, but igad is farther behind.
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