EAC negotiations for a Monetary Union to be ready by 2023, says Sitta

THE idea by the East African Community (EAC) member states of having a common momentary coin to be used as a means of exchange within the regional bloc is not yet in place by now, The Minister for East Africa Cooperation Samwel Sitta said in Parliament on Friday this week.  Minister Sitta made a clarification when he was tabling his ministry’s budget estimates of income and expenditure for 2013/14 financial year and noted that, his ministry continues to coordinate and lead the negotiations of the Protocol for the establishment of the East African Monetary Union. He told the house that, the negotiations are at the final stages adding that, a road map towards the establishment of a Monetary Union has been prepared. However, he said that according to a road map, fundamental requirements for the Monetary Union will be finalized within ten years’ time from now after entering into force of the protocol, adding that, the purpose of this road map is to ensure that the foundations for the Monetary Union are established for a smooth implementation of the Monetary Union.  He further noted that, key issues outlined in the road map towards the establishment of Monetary Union include the establishment of a fully fledged Customs Union and Common market, harmonization of related policies and laws to enable the attainment of the agreed macroeconomic convergence criteria, and the establishment of important institutions for the implementation of Monetary Union. The partner states have agreed on the criteria of Macroeconomic convergence which will enable the community to determine the readiness of the partner states to join the Monetary Union and to monitor the progress of implementation.   He outlined the agreed criteria like the inflation rate of not exceeding 8 percent, budget deficit including grants of not more than 3 percent of the Gross Domestic Product (DGP), National debt of not more than 50 percent of the GDP, and foreign currency reserves to cover a ;period of four and half months. During the 14^th summit   held in November 2012, the EAC Heads of State received the recommendations and draft of the modal structure federation of East Africa , the road map for the implementation of the recommendations from the team of experts tasked to identify the fears, challenges and concerns  towards the establishment of the political federation, and road map for the establishment of key institutions for the implementation of the initial stages of the integration, namely the customs union, common market and the Monetary Union . The Heads of State directed that the model of the political federation and the road maps be submitted to the partner states for their consultations, consultations are going on.