East African countries moving toward Monetary Union

Establishing a Customs Union has helped streamline border clearances, simplify work permit issuance, and ensure the recognition of professional agreements by member countries of the East African Community (EAC), a senior official of the International Monetary Fund (IMF) said recently.

Abebe Aemro Selassie, head of the IMF’s African department, said that as a result, regional trade has increased by over 40 percent in the last five years.

Five EAC countries – Kenya, Uganda, Tanzania, Burundi, and Rwanda – have joined forces with the aim of forming a single currency area by 2024.

Since the project’s inception in 2000, these countries have been laying the groundwork for greater economic integration.

Measures such as establishing a Customs Union has helped streamline border clearances, simplify work permit issuance, and ensure the recognition of professional agreements by member countries.

“Faster economic integration within the East African Community is a potential game changer, as it holds the promise of improved productivity, competitiveness, and welfare gains,” Abebe.

Monetary unions and common currency areas are not new to Africa. The West African Economic and Monetary Union was formed in 1994 and shares the CFA franc among eight West African countries, while Namibia, Swaziland, and Lesotho have been linking their currencies to the South African rand under a Common Monetary Area established in 1986.

 

NO COMMENTS