November 1, 2016
Establishing and buttressing a Customs Union and a Common Market for the East African region were top of the agenda this week when economic policy makers from the East African Community, the European Union, and the International Monetary Fund met in Tanzania to discuss creating an effective path to EAC regional integration.
The meeting, which took place in Arusha earlier this week, focused on building on the progress already made in the financial sector such as integration of the payment systems and financial markets to effectuate the region’s smooth transition to East African Monetary Union.
The event, which gathered regional ministers and regulators, finance ministers, Central Bank Governors, senior policymakers and representatives from the academics, civil society, and private sector from across the EAC member countries, as well as senior representatives from international financial institutions and other monetary unions, served as a platform for participants to gauge the current progress and pace of economic integration in the East Africa region since the establishment of the Custom Union in 2005 and the Common Market in 2010.
The EAC member countries include Burundi, Kenya, Rwanda, Tanzania and Uganda.
While lauding the region’s advancement and significant progress on the financial technology front, which has put the region ahead of many other countries in the world, participants urged for further reforms and convergence of monetary policy frameworks and operations, and the establishment of a new institutions within the region that will play a key role for the implementation and resilience of the union.
Underscoring how consequential it is for the region to ensure the stability of the future monetary union against the risks involved in macroeconomic convergence, participants agreed pace and proper sequencing of financial integration as well as closely monitoring budgetary deficits and public debts are of paramount importance to meet the convergence criterion.
Though considerable steps have been taken toward regional integration, such as a move toward a single entry visa, eliminating internal tariffs and reducing processing times at ports, participants also asserted the need to implement a single customs territory, tax administration and harmonization and an automate trade process that would help facilitate trade process as well as accountability among member states, which are crucial to a successful regional integration process.
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