East African Community (EAC) states will today start discussions on the establishment of a monetary union and the adoption of a single currency throughout the region.
The four-day inaugural meeting of the High Level Task Force (HLTF) to negotiate the protocol to establish the East African Monetary Union (EAMU) takes place at the Mt. Meru Hotel in Arusha, Tanzania.
The primary rationale for a monetary union is to reduce the costs and risks of transacting business across the national boundaries of those countries which comprise the monetary union, the EAC said in a statement.
The EAC added that a single currency would remove the costs of having to transact in different currencies and the risk of adverse exchange rate movements for trade within East Africa.
The HLTF, constituting senior officials from the Partner States ministries of finance, planning and economic development, EAC affairs, as well as central banks, capital markets authorities, insurance and pensions regulatory agencies, and national statistics offices, is expected to among others, consider and adopt the methodology of work, review and refine the draft roadmap towards the EAMU, and lastly agree on the calendar of activities for the negotiations process.
At a summit in 2007, the EAC Partner States decided for the achievement of monetary union by 2012. A study that was undertaken by the European Central Bank (ECB) and the EAC, however, found this goal to be “unrealistic.”