News / Africa

East Africa Looks Towards Single Currency by 2012

Michael Onyiego

With the East African Community Common Market Protocol now in effect, the region is looking to launch a single currency by 2012.  Many hope the integration will break down economic barriers across the region, but there is much work to be done before the regional dream is realized.  

The members of the East African Community, Kenya, Rwanda, Tanzania, Burundi and Uganda, officially launched the Common Market Protocol on July 1.  Under the protocol, the region hopes to unlock the economic potential of its vast natural resources and more than 130 million inhabitants.

With the start of the common market, member states have agreed to open their borders to each other and allow goods and services to move between countries without fees or restrictions.  The protocol has also removed barriers for people, allowing citizens in the region to live and work anywhere in East Africa without work permits.

The common market is essentially the first phase in the vision for regional integration.  By 2012, the East African Community hopes to implement a single currency and monetary union for member states.

Analyst on the Kenyan economy Robert Shaw says integration makes perfect sense for East Africa.

"In the global world, a single country, and particularly a single African country which has a very small economy, it makes sense for there to be a greater bloc, for two reasons:  One, the potential for trading within that block is great, and we've seen it.  We've seen it even with the tentative moves that have gone so far," said Shaw.  "The increasing trading between Kenya, Uganda, Tanzania, to a lesser extent Rwanda, etc. has increased year after year.  It makes sense.  The second point there is, that the bigger your market, that is much more attractive for investors, locally and internationally."

Investors are already taking notice of the region's potential.  According to the United Nation's 2010 World Investment Report, the region received more than $2 billion worth of foreign investment in 2009 alone.  Shortly after the common market became operational, Turkey announced it would establish an export processing zone within the East AFrican Community to expand trade with the region.

The promise of the new market is also attracting new countries.  South Sudan is widely expected to become an independent state after a referendum this January.  Analysts such as Robert Shaw believe the new state will opt to join the EAC.

But there are many obstacles to overcome before a single east African currency can become reality.

The common market took effect on July 1, but Shaw notes there are still many barriers preventing its full implementation.  All of the EAC members agree in principle to the benefits of the expanded market, but there are differing visions for achieving it.

While Kenya and Rwanda have already moved to eliminate work permit requirements for east African citizens, Uganda, Rwanda and Burundi have retained their requirements.  The Ugandan government has also advocated for regional work permits rather than their complete elimination.

And despite the elimination of visas for citizens in the region, many are still subject to restrictions at the border.

But many in the East African Community remain confident that a monetary union can be achieved by 2012.

EAC Deputy Secretary General Alloys Mutabingwa says that concerted regional reform will lay the groundwork for a common currency.

"It is sounding ambitious, but we are optimistic we will achieve that target.  For the common currency to effectively be in place, we are looking at three main things to be accomplished.  One is the common market itself having to be effective,"Mutabingwa said.  "Two is the convergence of most of our macroeconomic policies.  Three is the legal side; the laws governing the common market having to be integrated."  

According to Mutabingwa, EAC members will start negotiations soon to unify regional policy regarding the market.  The deputy secretary general also told VOA that mechanisms such as an East African Community Monetary Institute were being established to guide the integration process and oversee the creation of the common currency.

If the monetary union is established, it could be a step towards an even more ambitious venture.

The stated goal of the East African Community is to set up a political federation by 2015.  While expectations for the proposed state range from a European-style union to a fully integrated east African nation, observers believe the federation could be an economic and political leader in Africa.

But the success of the federation is dependent on the success of the current economic integration.  If the common market and the monetary union are properly implemented, they could create a new country on the continent.

You May Like

Will Cuba Follow the Southeast Asia Model?

Decision to restore ties between US and Cuba has some debating whether it will lead to enhancement or regression of democracy for Communist island nation More

Kenyan Designer Finds Her Niche in Fashion Industry

‘Made in China’ fabrics underlie her success More

Report: CIA, Israel's Mossad Killed Senior Hezbollah Commander

The Washington Post story says Imad Mughniyah was killed instantly by a bomb "triggered remotely" from Tel Aviv by Mossad agents More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Jefferson's Library Continues to Impress, 200 Years Lateri
X
Deborah Block
January 31, 2015 12:12 AM
Two hundred years after the U.S. Congress purchased a huge collection of books belonging to former President Thomas Jefferson, it remains one of America’s greatest literal treasures and has become the centerpiece of Washington’s Library of Congress. VOA’s Deborah Block reports.
Video

Video Jefferson's Library Continues to Impress, 200 Years Later

Two hundred years after the U.S. Congress purchased a huge collection of books belonging to former President Thomas Jefferson, it remains one of America’s greatest literal treasures and has become the centerpiece of Washington’s Library of Congress. VOA’s Deborah Block reports.
Video

Video Egypt's Suez Canal Dreams Tempered by Continued Unrest

Egypt plans to expand the Suez Canal, raising hopes that the end of its economic crisis may be in sight. But some analysts say they expect the project may cost too much and take too long to make life better for everyday Egyptians. VOA's Heather Murdock reports.
Video

Video Threat of Creeping Lava Has Hawaiians on Edge

Residents of the small town of Pahoa on the Big Island of Hawaii face an advancing threat from the Kilauea volcano. Local residents are keeping a watchful eye on creeping lava. Mike O’Sullivan reports.
Video

Video Pro-Kremlin Youth Group Creatively Promotes 'Patriotic' Propaganda

As Russia's President Vladimir Putin faces international pressure over Ukraine and a failing economy, unofficial domestic groups are rallying to his support. One such youth organization, CET, or Network, uses creative multimedia to appeal to Russia's urban youth with patriotic propaganda. VOA's Daniel Schearf reports.
Video

Video Filmmakers Produce Hand-Painted Documentary on Van Gogh

The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Issues or Ethnicity? Question Divides Nigeria

As Nigeria goes to the polls next month, many expect the two top presidential contenders to gain much of their support from constituencies organized along ethnic or religious lines. But are faith and regional blocs really what political power in Nigeria is about? Chris Stein reports.
Video

Video Rock-Consuming Organisms Alter Views of Life Processes

Scientists thought they knew much about how life works, until a discovery more than two decades ago challenged conventional beliefs. Scientists found that there are organisms that breathe rocks. And it is only recently that the scientific community is accepting that there are organisms that could get energy out of rocks. Correspondent Elizabeth Lee reports.
Video

Video Paris Attacks Highlight Global Weapons Black Market

As law enforcement officials piece together how the Paris and Belgian terror cells carried out their recent attacks, questions are being asked about how they obtained military grade assault weapons - which are illegal in the European Union. As VOA's Jeff Swicord reports, experts say there is a very active worldwide black market for these weapons, and criminals and terrorists are buying.
Video

Video Activists Accuse China of Targeting Religious Freedom

The U.S.-based Chinese religious rights group ChinaAid says 2014 was the worst year for religious freedom in China since the end of the Cultural Revolution. As Ye Fan reports, activists say Beijing has been tightening religious controls ever since Chinese leader Xi Jinping came to office. Hu Wei narrates.
Video

Video Theologians Cast Doubt on Morality of Drone Strikes

In 2006, stirred by photos of U.S. soldiers mistreating Iraqi prisoners, a group of American faith leaders and academics launched the National Religious Campaign Against Torture. It played an important role in getting Congress to investigate, and the president to ban, torture. VOA's Jerome Socolovsky reports.
Video

Video Former Sudan 'Lost Boy' Becomes Chess Master in NYC

In the mid-1980’s, thousands of Sudanese boys escaped the country's civil war by walking for weeks, then months and finally for more than a year, up to 1,500 kilometers across three countries. The so-called Lost Boys of the Sudan had little time for games. But one of them later mastered the game of chess, and now teaches it to children in the New York area. VOA’s Bernard Shusman in New York has his story.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid