1 December 2013

East Africa: Optimism As EAC Signs Monetary Union Protocol

The East African Community on Saturday took another big step towards closer integration, with the signing of the East African Monetary Union (EAMU) protocol at Speke Resort Munyonyo in Kampala.

But for an initiative that has promised so much, the fog of divisions and tensions among leaders still hovered, making the signing largely an investment in optimism.

In the run-up to Saturday, the narrative had been dominated by talk of tensions between the zealous coalition of Kenya, Uganda and Rwanda on the one hand, and the "marginalized" duo of Tanzania and Burundi.

This summit, more than anything else, was billed as a chance for the regional bloc to dispel that talk and show itself as a united front. Instead, an hour to the start of the summit, some officials were still not sure whether Tanzanian leader Jakaya Kikwete, who had been expected the previous day, would make it.

He eventually did arrive, and - six hours late - the leaders made it into the hall. First in were Presidents Yoweri Museveni and Rwanda's Paul Kagame, side by side - followed by Kenya's Uhuru Kenyatta, Burundi's Pierre Nkurunziza and Kikwete.

Then they sat down for the inking business - Kagame, Museveni, Kenyatta, Kikwete and Nkurunziza - in that order. The photo opportunity followed much the same arrangement, with Kikwete and Nkurunziza on the fringes.

But those subtleties aside, Saturday was an important day, as the five leaders signed to put the region on the road towards a single currency and enhanced regional trade and investment.


President Kenyatta described the monetary union protocol as key milestone in the integration process. It is a third pillar of the EAC integration, after the Customs Union and Common Market with the ultimate, political federation.

The summit was held under the theme 'One people, One destiny: Towards a Monetary Union'.

It also put to rest earlier speculation that Kikwete was unwilling to sign the protocol, after Tanzania complained of being sidelined by the 'coalition of the willing' presidents Yoweri Museveni, Paul Kagame, and Uhuru Kenyatta.

Political federation

The outgoing community chairman, President Museveni, explained the historical journey of the East African Community (EAC), and how he, together with presidents Daniel arap Moi of Kenya and Benjamin Mkapa of Tanzania initiated the idea of reviving the then defunct EAC in 1999, which became operational in July 2000.

Museveni said since then the EAC had made significant strides like the signing of the Customs Union and Common Market protocols, but at the same time noted that weaknesses in the implementation of these protocols was a problem.

Despite the implementation gap, he highlighted some achievements. For instance, he said, the number of days it takes to transport goods from the Kenyan port of Mombasa to Kampala had significantly reduced from 18 days previous to now three while from Mombasa to Kigali from 24 days to only four. He said he had met and also written to the presidents of Russia and China to help East Africa in its infrastructure projects.

Museveni stressed the need for EAC to ultimately work towards attaining a political federation.

"[Idi] Amin would not have taken power here. Genocide would have been averted in Rwanda and Burundi because we would have intervened and stopped it," he said, stressing that the 2007/08 post-election conflicts in Kenya would have also been averted.

"We would have helped, but we couldn't because they are sovereign states. If the current generation of leaders fails to achieve this [political federation], it will be a serious failure," he said.


President Museveni officially handed over the leadership of the EAC Heads of States summit to Kenyan president Uhuru Kenyatta. In his maiden speech, Kenyatta said as the integration dream continues to crystallize into a social-economic and political ready, nobody must be left behind and underscored the need to sensitize all the citizens in the regional bloc about the integration agenda.

"As we integrate, we cease to be a group of neighbouring nations and become one people. I assure all that our community is strong and your leader's commitment to it is unwavering. Let us all put an end to unnecessary rumourmongering, work and speak with one voice'," he said amidst applause.

He reiterated the need for the community to rise up and compete effectively in the global economy, adding that the signing of the East African Monetary Union protocol was a logical culmination of the federation dream.

"Business will find more freedom to trade and invest more widely, and foreign investors will find additional, irresistible reasons to pitch tent in our region. Such advantages will no doubt result in increased investment and further transformation of East Africa," Kenyatta said.

However, he regretted that numerous non-tariff barriers (NTBs) continued to hurt trade and businesses, which must confront these barriers with urgency. He said it was time to liberate the people of East Africa by removing these barriers, so that the dream of integration becomes real.

He emphasized the need for further investment in infrastructure such as roads, railways, ICT and aviation, stressing it was a foundation of the integration. Poor infrastructure, he said, was making the cost of goods and services unreasonably high.

At the end, the leaders issued a communiqué, according to which partner states should conclude the ratification of the EAMU protocol by July 2014. The admission of South Sudan in the community was deferred to the next summit in April 2014, pending a report of the high-level verification committee and Somalia in the November 2014 summit.

The summit also resolved that the East African passport would be launched in November 2015. The summit also approved Dr Emmanuel Ugirashebuja from Rwanda and Justice Monica Mugenyi from Uganda to the East African court of justice. The Judges were sworn-in in the presence of the heads of states.

Mugenyi replaces justice Mary Stella Arach-Amoko, who returns home, to Uganda's Supreme court. The summit also approved the extension of the mandate of the East African court of justice to cover matters on trade, investment as well as matters associated with the monetary union.

On human rights and crimes against humanity, the summit directed the council of ministers to work with African Union (AU) on this matter.

EAMU benefits

Addressing journalists before the summit started, Dr Louis Kasekende, the deputy governor Bank of Uganda, said the East African Monetary Union (EAMU), was expected to reduce the cost of doing business, ensure the region's economic stability and further facilitate regional trade. He underscored the need to make EAC more functional.

"Both tariff and non-tariff barriers must be removed if we are to realize our objective of promoting regional trade" he said.

"It is going to take us [some time] to put in place enabling structures, harmonize our laws, and establish institutions. Announcing the monetary union is one thing, but we have a lot of work to do, to make it functional".

After the signing ceremony, as the leaders went for lunch, Kagame and Kenyatta took one direction Kikwete and Nkurunziza took another, with Museveni, who shortly left them to drive to Kololo for a rally. All the leaders had been expected at Kololo. But they were tired, and left Museveni to go it alone.

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