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East Africa: Budget Deficits, High Domestic Debt Continue to Plague EAC
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The Monitor (Kampala)
6 May 2008
Posted to the web 6 May 2008
Martin Luther Oketch
Kampala
Budget deficits, high domestic debt, high interest rate and relatively high levels of non-performing loans continue to be the major challenges facing East Africa countries, the EAC Central Bank governors have observed.
In a joint statement issued on May 2 at the meeting of the Monetary Affairs Committee held in Kampala, Central Bank governors observed that the partner states had managed to achieve a considerable level of the macroeconomic stability as seeb in their relatively low and stable inflation in recent years.
The agenda of the meeting was to discuss, among others, progress made towards the implementation of the decisions of the 10th MAC Meeting, which they expressed satisfaction that all partner states had made commendable progress in implementing their previous decisions.
"The East African Community countries registered strong foreign exchange inflows, which coupled with the weakening dollar led to strong appreciation of local currencies," the statement said.
While recognising the progress made by the East African Community in the previous year, the EAC governors noted the developments in the global economy, pose a challenge to the management of East Africa Community economies.
The challenges include turbulence in the international financial markets that rose out of the collapse of the United States Subprime mortgage market, and the world oil and commodities prices.
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Ambassador Julius Onen, the deputy Secretary General of EAC said that the common market and monetary union fringes a lot on the work of governors and expressed hope that by 2012 the community would have realised a Monetary Union.
The meeting also saw the governors deliberating on a wide range of issues, including: the efficiency of the financial sector in the region, the status of the national payments systems, legal and regulatory frameworks particularly with regard to the banking and microfinance sub-sectors, information technology including emerging issues of electronic banking and its impact on monetary policy, and the building of requisite technical capacity to facility effective implementations of policies by the respective Central Banks.
The governors included Bank of Uganda Governor Emmanuel Tumusiime Mutebile, Central Bank of Kenya Njunguna Ndung'u and Bank of Tanzania Governor Benno Ndulu, National Bank of Rwanda Governor Francois Kanimba, and Bank of the Republic of Burundi Governor the Paul Ndayongeje.
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