Monetary Union not to work for EAC
A model monetary union that has worked in Europe for over a decade may not necessarily work in East Africa. According to International Monetary Fund (IMF) officials, while the European Union’s (EU) macro-economic integration provided an important starting point for the East African Community (EAC), the region’s negotiators have an additional task of tweaking it to fit the region’s economic landscape. EAC negotiators have previously borrowed heavily from the EU model to speed up the integration process and the views from the IMF officials are definitely a set- back to integration negotiators
Tripartite Agreement by 2014
The tripartite agreement of the three African regional economic communities (RECs) is to be signed by 2014, said the EAC Summit Heads of State Summit Chair Mwai Kibaki. “Negotiations towards a Common Market for Eastern and Southern Africa-East African Community-Southern African Development Community (COMESA-EAC-SADC) tripartite agreement are scheduled to be completed within two years: the three RECs involved are committed to meet the deadline,” he said.
The president noted that the current level of trade within Africa was low compared with other regions saying it was imperative to review the achievements made so far and chart the way forward for increased trade
WB Faults Bloc over Integration
The EAC risks falling behind schedule due to lack of institutional capacity and manpower. Overall progress of EAC is, unsurprisingly, hobbled as much by constraints in institutional capacities as by member countries’ intentions to protect their own interests, and often vested interests of specific groups and players. The World Bank study found that the Customs union was never fully implemented, while tariffs have been removed, non-tariff barriers remain a major impediment to free flow of goods, services, labour and capital. East Africans still need work permits in Uganda, Tanzania and Burundi.
The World Bank instead suggested that EAC countries should start with small, manageable projects such as setting up an Economic Integration Zone similar to those in East Asia – a zone of about 10,000 hectares with functioning infrastructure that would attract major investors.