THE proposed Central Bank of East Africa may not necessarily be built in Arusha, despite the city's position as community headquarters.
This was revealed yesterday by East African Community (EAC) Secretariat that stated the proposed regional monetary facility will soon materialize but its local is subjected to head of states approval.
The East African Monetary Union (EAMU) Protocol provides for the establishment of regional central bank--East African Central Bank (EACB), which will be preceded, in practice, by the East African Monetary Institute (EAMI).
The EAMI will be established first as transitory institution to do all the preparatory work for the establishment of the Monetary Union, after which the East African Monetary Institution is going to be transformed into the East African Central Bank (EACB).
East African Community Secretariat, Senior Public Relations Officer, Mr Simon Owaka, said the Protocol provides that the Summit of the EAC Heads of State, on recommendation from the Council of Ministers, will decide which of the EAC partner states is going to host the bank.
"But the East African Central Bank will not necessarily be based in Arusha. "The EACB can be hosted by any of the six Partner States," Mr Owaka told the 'Daily News'. The EAC has a large vacant plot of land in Arusha at Kisongo area, slightly outside the city's central business district and it was initially suspected that the area will be the location for the proposed regional central bank.
"The Community will soon embark on resource mobilisation for the development of the plot," explained Mr Owora Richard Othieno, the Head, Corporate Communication and Public Affairs at the EAC Headquarters without explaining what exactly the plot will be used for.
According to EAC Partner States, the establishment of a strong Monetary Union requires robust institutional framework to ensure compliance and safeguard the convergence process.
To that effect, the EAMU Protocol provides for the establishment of four support institutions including: the East African Monetary Institute-- to be set up as a precursor to the East African Central Bank; the East African Statistics Bureau; the East African Surveillance, Compliance and Enforcement Commission, and; the East African Financial Services Commission.
Establishment of each of these four institutions will among others require legal instruments in the form of a Bill. The EAC Secretariat is currently working with partner states to develop legal instruments for the establishment of these institutions.
Bills for the establishment of the EAC Monetary Institute and the EAC Bureau of Statistics have so far been developed and cleared by the Council of Ministers and forwarded to Legislative Assembly (EALA) for enactment.