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East Africa: EAC Central Banks 'Must Harmonise'
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The Citizen (Dar es Salaam)
8 July 2008
Posted to the web 8 July 2008
Tom Mosoba
Bank of Tanzania governor Prof Benno Ndulu has called for close cooperation among EAC central banks to enhance efficiency and timely response to globalisation challenges.
In a speech read on his behalf by his deputy, Mr Juma Reli, at the official opening of a training seminar for EAC central bank managers, Prof Ndulu said working together would be effective in developing and monitoring the financial sector among member countries of the fast growing EAC trading bloc.
The BoT chief urged closer cooperation among the central banks to fend off negative competition and enable them to respond timely to globalisation challenges.
He added that central banks in Tanzania, Kenya, Uganda, Burundi and Rwanda were all currently operating under complex and dynamic conditions that required them to constantly re-examine their respective roles.
"In such a hostile environment, a single central bank cannot individually undertake successful initiatives in the advancement of the national economic and financial development," said Prof Ndulu.
In addition, he said economic cooperation within the region should provide the "first line of defense" for the institutions as they strive to remain relevant and productive.
Prof Ndulu also pointed out that for the central banks to prevent commercial bank failures, there is need to train their personnel to equip them with knowledge and skills to competently handle the dynamics of the financial sector.
The four weeks training seminar started yesterday in Dar es Salaam. According to BoT director for personnel and administration, Mr Len Kisarika, the seminar has brought together middle line managers to exchange ideas and learn from each other's experiences.
Mr Kisarika said the joint training was the 17th and for the first time since the inception of the initiative in the 1960s, all the five EAC central banks are represented.
During the four weeks of training, the managers are expected to explore the major aspects of operations inside a central bank, and would provide their own input for desired changes within the banks.
And coming at a time when some of the central banks in the region are experiencing tumultuous times, the seminar is also expected to provide a platform to discuss such issues.
Possibly high on the list of controversies within the central banks is the ongoing investigations into the reported Sh133 billion thefts of funds from the External Payments Arrears (EPA) account from BoT.
The Kenyan central bank has also attracted negative limelight for the role it played in the controversial sale of a multi-billion shillings luxurious hotel, Grand Regency, in Nairobi.
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The bank's governor, Prof Njuguna Ndung'u and finance minister Amos Kimunya are under intense pressure to resign for the sale of the hotel in controversial circumstances that have opened divisions and threaten the delicate coalition government of President Mwai Kibaki and Prime Minister Raila Odinga.
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