East African Community: Towards the Monetary Union

, by Anna Sarotto

East African Community: Towards the Monetary Union

At the last Summit held on August 20th, 2007, the East African Community (EAC) Heads of State deliberated and decided to move expeditiously towards establishing a Common Market and a Monetary Union by 2012 and then move on to a Political Federation.

The EAC Council of Ministers, who met in September, reviewed progress towards the establishment of the EA Monetary Union, noted that the negotiations on the Common Market should begin in October 2007 so as to be finalized by December 2008 and assured guidance on the necessary steps in the process of establishing the Monetary Union by 2012.

In recent decades, Africa has suffered from abysmal economic performance and has become increasingly marginalized. Since independence, Africa has seen a series of regional integration initiatives aimed at reducing conflicts and promoting scale economies in production and distribution. However, there has not been a generalized takeoff towards rapid growth or expansion of trade.

There are a number of regional monetary integration initiatives presently being considered in West and in South Africa. In East Africa, Kenya, Tanzania and Uganda have agreed to revitalize the EAC, which was dissolved in the 1960s, and the Republics of Rwanda and of Burundi joined recently.

The EAC regional integration process is at a high level at the moment. The encouraging progress of the East African Customs Union, the enlargement of the Community with the admission of Rwanda and Burundi, the ongoing negotiations of the East African Common Market, as well as the consultations on fast-tracking the process towards an East African Federation, all underscore the serious determination of the East African leadership and citizens to construct a powerful and sustainable East African economic and political bloc.

What the EAC is

The East African Community (EAC) is the regional intergovernmental organisation of the Republics of Kenya, Uganda, the United Republic of Tanzania, the Republic of Burundi and the Republic of Rwanda, with its headquarters in Arusha, Tanzania. The Treaty for the Establishment of the East African Community was signed on 30th November 1999 and entered into force on 7th July 2000 following its ratification by the original three partner States – Kenya, Uganda and Tanzania. The Republic of Rwanda and the Republic of Burundi joined the EAC on 18th June 2007 and became full Members of the Community with effect from 1st July 2007.

Aims and Objectives

The EAC aims at widening and deepening co-operation among the Partner States in political, economic and social fields for their mutual benefit. To this end the EAC countries established a Customs Union in 2005 and are working towards the establishment of a Common Market by 2010 and a Monetary Union by 2012 and ultimately a political Federation of the East African States. The major developments and expansion of the regional programme reflect a serious determination of the five EAC Partner States to construct a strong regional bloc. The 3rd East African Development Strategy (2006-2010), which was launched in November 2006, sets out an ambitious programme and a target for the realization of a vastly transformed and fast-modernizing East African region by the years 2010/2015.

Enlargement of the Community

The realization of a large regional economic bloc encompassing Burundi, Kenya, Rwanda, Tanzania and Uganda with a combined population of 120 millions, a land area of 1.85 million square kilometres and a combined gross domestic product of $ 41 billion, bears great strategic and geopolitical significance with prospects of a renewed and reinvigorated East African Community.

This article was originally published in the March 2008 edition of The Federalist Debate www.federalist-debate.org, Papers for Federalists in Europe and the World.

Image: Logo of the East African Community, source: EAC

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