THE International Monetary Fund ( IMF) boss has
cautioned East African Community ( EAC) member States on rushing into a single
currency plan.EAC States have commenced the creation of a single
currency under the Monetary Union protocol to ease trade across the region.
The five EAC countries in late November 2013 signed
a protocol laying the groundwork for a Monetary union within 10 years that they
expect will expand regional trade.
This will see
the five EAC nations harmonise their monetary and fiscal policies and establish
a common central bank. Kenya, Uganda, Tanzania and Rwanda already present their
budgets simultaneously every June. The advisory comes at a time when the Euro
Zone is still depressed as several countries run huge public debts and suffer
high unemployment.
“The Monetary
Union for East Africa is an opportunity but also a major challenge,” said IMF
Managing Director Christine Lagarde. Integration process
“It will be important
to draw upon the experience and lessons learned from other regions and to
manage the process carefully.”
She made the remarks yesterday while addressing a
forum organised by the Kenya Private Sector Alliance. The IMF boss’ visit to
Kenya is seen as routine and part of the institution’s mandate to ensure that
there is stability in the global economy.
Kenya is the second largest investor in the EAC
region. Integration and the opening up of new markets is set to create a strong
middle class with domestic demand becoming an engine of growth. While Kenya is
moving ahead of her neighbours in the integration process, her economy is still
performing below potential.
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