Despite the persistent crisis in the euro zone that has weakened the European Union and the entire global economy, central banks in the East African Community (EAC) believe that the establishment of the East African monetary Union is still attainable.
Claver Gatete, Governor of the National Bank of Rwanda, says that the establishment of a Monetary Union will not affect the macro economic and financial stability of East African member states.
“We have learnt from experience of the euro zone, West Africa and central Africa Monetary Unions and this is the work that is feeding into the negotiations that are going on,” he said during the 19th East African central bankers course held in Kigali on Monday.
Gatete noted that the team negotiating the EAC Monetary Union is cautious of the current global crisis especially, in the euro zone, adding that the experiences from the zone will be looked into in order to avoid the mistakes.
“Hopefully all these will be concluded by the end of this year and then we will have a protocol that is showing us the road map to make sure that we can avoid the problems euro zone faced,” he said adding “that’s why we had to learn from their experience”.
Under the arrangement of the Monetary Union, the five member States will form a regional central bank, introduce a single currency and harmonise the monetary policy.
Susan Mahembe, from central bank of Tanzania, is optimistic that by harmonisation of the banking systems of the central banks in the region will help pave way for a monetary Union.
“Ultimate goal of central banks is to attain the monetary union and that’s why we are building the capacity in those areas,” she said
Mahembe notes that through the 19th East African central bankers training, professionals from central banks will be inducted into how banking systems will be harmonised to pave way for the Monetary Union.
“The objective is to get them exchange ideas and experiences on central bank operations so that they move on to the harmonisation criteria…. these people should be conversant with what they are supposed to do,” she added
Harmonisation criteria are about bringing together most of the central banking operations that will help central bankers shift to having a monetary Union.
Some of the systems that need to be harmonized include payment systems, communication strategy, and financial policies among others.
By Dias Nyesiga, The New Times