Bank of Tanzania governor Tutuba eager for EAC bank settlement

 

New BOT Governor  Emmanuel Tatuba
By 

Daily Monitor

Summary

 

A looming decision to determine the host country for the planned East African Monetary Institute (EAMI), the regulator that will oversee the monetary union of the seven-member East African Community, is something the new Bank of Tanzania governor is eagerly anticipating.

Mr Emmanuel Mpawe Tutuba, just four months shy of his second anniversary as permanent secretary in the ministry of Finance and paymaster general of the United Republic of Tanzania, was on January 7 tapped by President Samia Suluhu to head the country’s central bank.

He is only the eighth person to attain such a position, the youngest and the first in a generation to emerge from a non-academia background.

Mr Tutuba joins an exclusive club of eminence in monetary policy in a region so interdependent; it is the most integrated economic bloc on the African continent.

His predecessors such as Benno Ndulu and Florens Luoga left him a docket already aligned with peers as central banks in the region have long reached agreements to move to market-based monetary policies from monetary targeting regimes and to price-based monetary policy.

While the 49-year old is looking to strengthen such cooperation in fostering the nascent monetary union that’s on paper targeted to be in place next year, he has also pledged to support every decision of the council of ministers as they pursue integration.

“On the East African Monetary Union, we will actually provide full support and engage with my counterparts in all the East African countries to make appropriate measures that will enable us proceed with other stages,” Mr Tutuba told  Monitor in a phone interview from Tanzania’s commercial capital of Dar es Salaam.

“I understand some of the challenges which are on the ground, so we will just deliberate with my counterparts in different countries and see the way we can maybe move forward,” he said.

Last year, Tanzania emerged the best candidate to host the EAMI, edging out Burundi, Kenya and Uganda. The latter two member states protested the decision of the team of experts that conducted the evaluation, a move that has stalled the process and caused delays in regional institution-building even as timelines—conceived a decade ago when the monetary union protocol was signed—are closing-in.

As a seasoned technocrat regularly tasked with implementing presidential and ministerial decisions covering the region, and having served on the board of East African Development Bank, Mr Tutuba is no stranger to East Africa’s geopolitical raucousness. No wonder he retains confidence in the evaluation process and is optimistic of his country’s chances.

Decisive or disputed win?

“Tanzania won. It was the first based on the criteria, but during the last meeting the council of ministers couldn’t approve it. They had some reservations which are still under discussion.

They wanted more consultations with their heads of states,” Mr Tutuba noted.  “So we will also continue to provide support and see whether they will be in position to get approval because now the approval is under the jurisdiction or under the mandate of the council of ministers,” he added.

In July, while announcing a plan to protest the decision that recommended Tanzania as host, Ms Rebecca Kadaga— Uganda’s East African Affairs minister—disputed the fact that her country’s southern neighbour hosts many institutions of the East African Community.  This is a key criterion that draws on the history of the bloc’s previous collapse to discourage concentration of institutions within one country.

Tanzania is home to the headquarters of the East African Community, with the secretariat based in the country’s northern city of Arusha as are the East African Legislative Assembly and the East African Court of Justice. The same city also hosts the East African Community Competition Authority while the East African Kiswahili Commission is based on the nation’s archipelago islands of Zanzibar.

Uganda hosts the East African Development Bank in its capital, Kampala and the East African Civil Aviation and Security Oversight Agency in the central town of Entebbe. Uganda also hosts two other EAC entities—the Inter-University Council of East Africa in the Kampala suburb of Kyambogo and Lake Victoria Fisheries Organisation in its eastern city of Jinja.

Meanwhile, Kenya has just the Lake Victoria Basin Commission hosted in the country’s western town of Kisumu.

Burundi hosts only the East African Health Research Commission in the former capital, Bujumbura, while Rwanda is home to just the East African Science and Technology Commission based in the capital, Kigali.

South Sudan and the Democratic Republic of the Congo, the newest members of the bloc, are yet to score hosting opportunities and it’s not known whether they have expressed interest in any.

The establishment of the Central Bank of East Africa or EAMI was supposed to be preceded by the East African Monetary Institute, which should develop foundational knowledge, capacity and strategies to execute the former.

However, action on the institute is long overdue, considering it had been targeted to be operational in July 2021 by the council of ministers.

Even as he committed the Bank of Tanzania to comply with decisions of the council of ministers, Mr Tutuba, a trained economic planner and corporate manager, has no qualms with the process undertaken by the team of experts.

“Of course I understand the way those criteria were set. The modality which was used actually was very transparent: each country provided representatives and those representatives moved one country after another,” Mr Tutuba told this publication, adding, “The [committee] chairmanship was with our colleagues from Kenya, but the leading country was Tanzania because they had an observation based on equal distribution of these institutions—that they cannot be set within one country, they need to be established in different countries.”

 

Once implemented, a key benefit of the East African Monetary Union is the elimination of transaction costs that come with the use of different currencies for facilitating trade between countries.

An ironic tussle over hosting of key institutions by countries that have a stated goal of unity would be disconcerting without the reassurance of such leaders like Mr Tutuba.

“Those are some of the concerns which had been under consideration, but I do hope that the moment it will be concluded, whatever decision will be decided, of course for us as member states, we will be obliged to implement it,” said Mr Tutuba, adding, “Because it will be a decision of the council of ministers which is the institution which has been provided that mandate.”