TUESDAY, NOVEMBER 26, 2013

Uhuru roots for single currency ahead of EA fete

President Uhuru Kenyatta with Rwanda President Paul Kagame (centre) and Ethiopian Prime Minister Hailemariam Desalegn during the Arab-Africa Summit in Kuwait. President Uhuru Kenyatta is rooting for the creation of a single currency for East Africa as a way of strengthening competition in the region.

President Uhuru Kenyatta with Rwanda President Paul Kagame (centre) and Ethiopian Prime Minister Hailemariam Desalegn during the Arab-Africa Summit in Kuwait. President Uhuru Kenyatta is rooting for the creation of a single currency for East Africa as a way of strengthening competition in the region. Photo/DPPS 

In Summary

  • "In many ways, the Monetary Union is the logical culmination of integration efforts. All the things we seek in integration will be multiplied in the Monetary Union," said President Kenyatta.
  • The signing of the protocol would pave the way for adoption of a single currency within a 10-year period.
By JOHN NGIRACHU 
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President Uhuru Kenyatta is rooting for the creation of a single currency for East Africa as a way of strengthening competition in the region.

Addressing the East African Legislative Assembly, Mr Kenyatta said this would also reduce the costs of transacting business by eliminating use of different currencies across the five countries. 
FIRST STEP
On Saturday, the regional leaders are expected to sign the East African Community Monetary Union Protocol during the Heads of State Summit, which is the first step to adopting a single currency.

"In many ways, the Monetary Union is the logical culmination of integration efforts. All the things we seek in integration will be multiplied in the Monetary Union," said President Kenyatta.

The signing of the protocol would pave the way for adoption of a single currency within a 10-year period.

President Kenyatta said this would also assure investors that East Africa is "a genuine single market and an attractive place for business."

"Politically, the Monetary Union is a statement of our partner states' commitment to a shared destiny as East Africans and not just a group of neighbouring states," said President Kenyatta.

DELAYED BY A YEAR

The signing of the protocol has been delayed by almost a year, after missing the December 31, 2012, deadline due to failure by state parties to agree on the content of the protocol.

Rwanda, Kenya and Uganda have even, by as late as early the month, opposed changes they said may leave EAC exposed to ills troubling the European Union.

In the eurozone, debt and fiscal woes troubling Greece, Portugal and Spain risk collapsing the euro, with experts saying the trouble rose due to failure by the eurozone to effectively harmonise economic and fiscal rules before launching the single currency.

To avoid this, EAC is proposing that each country must maintain a headline inflation of not more than eight per cent, keep total gross public debt under 50 per cent of GDP, and maintain foreign exchange reserves equivalent to 4.5 months of imports.

However, an amendment to this draft now says that these rules do not need to apply to all partner states.

The Council of Ministers will meet on Thursday and Friday to finalise on the protocol ahead of the summit on November 30.