Tanzania Daily News (Dar es Salaam)

Tanzania: Kikwete for Gradual Monetary Union

Photo: In2EastAfrica
Rwandan franc.

PRESIDENT Jakaya Kikwete has advised the East African Community (EAC) Secretariat here to take things slowly as far as the proposed Monetary Union in the region is concerned.

"The first EAC, which collapsed in 1977 started crumbling at the monetary union stage around 1963 when each of the founding three states;

Kenya, Uganda and Tanzania decided to part ways from their previous joint single EA currency to their respective individual shillings," pointed out Mr Kikwete.

The Tanzanian Head of State was addressing members of the East African Legislative Assembly (EALA), at the latter's ongoing third Meeting of the first Session of the Assembly, which is taking place at the newly inaugurated EAC headquarters in Arusha.

"At the moment, teams of negotiators are investigating what exactly went wrong during the maiden EAC's monetary union plans so as to help the current community to iron out flaws before attempting a second feat in that direction," explained President Kikwete.

He insisted that when it comes to money, issues do get sensitive. It is envisaged that by embracing a single currency, EAC partner states would remove the costs of having to transact in different currencies and the risk of adverse exchange rate movements for traders and travellers alike within the region.

The monetary union stage is the third step for the integration after agreeing on a Customs Union and a Common Market. The next step that is planned after the Monetary Union is a Political federation. "This is the second year of our common market stage but very little has been accomplished.

I expected to see people from the five member states moving freely across the borders," stated Mr Kikwete. The East Africa Community member states; Kenya, Rwanda, Uganda, Burundi and Tanzania; are still grappling with plans for a regional Monetary Union Protocol whose deadline is drawn for next month.

The ongoing regional parliament sessions on the other hand, expect to receive Bills from the Council of Ministers, receive and consider reports from various Committees of the Assembly and consider Motions and Questions brought before the House.

The Assembly is being presided over by the EALA Speaker, Dr Margaret Nantongo Zziwa, and during the two-week period of its sitting here, it will discuss matters of legislative business. The EALA sitting also expects to receive Bills from the Council of Ministers and consider reports from various Committees of the Assembly. It will also hear motions and questions brought before the House.

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InFocus

Single East African Currency Encouraged

Rwandan franc.

A report by the African Development Bank says that if a monetary union is achieved, it will benefit in a greater macroeconomic convergence in the region. Read more »