EAC heads of state during a meeting in Kampala, Uganda on February 22, 2018. PHOTO | MORGAN MBABAZI | NMG
Kenya is lobbying to host the East African Monetary Institute
(EAMI) as the region prepares for the establishment of a single currency
regime by 2024.
Kenya’s Cabinet Secretary for East African Community (EAC) Peter Munya told The EastAfrican that Nairobi has already shown an interest in hosting the institute.
“Kenya
hosts only one EAC institution — the Lake Victoria Basin Commission.
With the experience the country has in international financial matters,
we are hopeful that Kenya will host the EAMI and will be backed by the
other partner states,” said Mr Munya.
The EAMI will be
a transitory institution that will do all the preparatory work for the
implementation of a monetary union and eventually transform into an East
African Central Bank.
According to Betty Maina,
Kenya’s Principal Secretary for the EAC Affairs, hosting the EAMI will
help the country attract more investments and strengthen its bid of
becoming a regional financial hub.
East African partner
states are working towards adopting a common currency to reduce the
cost of currency conversion and boost trade and investment in the
region.
It will also lift the region’s efforts of transforming into a common investment destination that is attractive to investors.
The
EAMI is part of the crucial institutions that need to be put in place
to facilitate the creation of a monetary union by the EAC partner
states. Others are the East African Statistical Bureau, East African
Financial Services and the East African Surveillance, Compliance and
Enforcement Commission.
The Monetary Union Protocol
was signed by the heads of state in Kampala on November 30, 2013 and
outlines a 10-year road map towards a monetary union in 2024.
According
to the protocol, the EAMI was supposed to have been up and running by
2015 while the other institutions are supposed to be operational this
year.
Operationalisation of these institutions has been
held back by the delayed enactment of supporting legislation by the
East African Legislative Assembly (EALA).
The Bills
have already been cleared by the Council of Ministers and forwarded to
EALA for enactment. However, the term of the previous EALA ended before
it could consider them.
According to the timetable, all
legislation for the creation of the institutions for the single
currency regime were to be passed by the regional legislative assembly
by the end of 2015.
The EAC member states are
struggling to comply with key economic targets on public debt,
inflation, forex reserves and budget deficit.
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