That means that this is something to be done within the current financial year – that is, 2021/2022 – in a situation where no such indication or inkling of preparations to that effect was evident in the government budget a couple of months ago.
Such a move would also have elicited a detailed statement of monetary policy movement and even a presidential address to the National Assembly. This is what happened in 2014 at the time of forming the ‘coalition of the willing’.
It is undeniable that there has been a sea change in attitudes concerning major bloc-level projects like the common market, the free movement of goods, people and capital, as well as auxiliary ones like the envisaged common currency and – ultimately – the political federation.
Most of these are however still in the drawing stages or the key issues are being ironed out, and it was a bit surprising to hear EAC Secretary General Dr Peter Mathuki making the declaration as to start using an EAC single currency this soon.
He had details on the advantages of having a single currency to boost intra-EAC trade but was much less clear on fiscal and monetary readiness for that.
Taking a businessman’s attitude rather than that of a fiscal expert, he said that the technical process to that effect would be fast-tracked in order to have it completed before the end of this year, as “we are late and need to run”.
The secretary general will be aware of the fact that such fast-tracking is in the ambit of the summit – heads of member states – to direct the relevant central banks to make such liaisons.
This statement can be interpreted as reflecting the wishes of certain quarters that the process be fast-tracked, thus exercising a certain amount of pressure on others, or that it is wishful thinking. But it is clear that his need to be backed by the partner state’ central bank governors.
The occasion itself was a CEOs Roundtable breakfast engagement on East African integration co-organised by the East African Business Council and KCB Bank.
The all-important issue is thus whether all the EAC partner states are truly ready for a common currency, two years earlier than tentatively set out.
Dr Mathuki said that the biggest barrier to intra-EAC trade is the presence of different currencies, so this must be sorted out with one currency – used across all borders.
This affirmation has admittedly plenty of insight, but it overstates the issue as traders know full well what any currency’s banknote is worth in any transaction.
Still, using a single currency is an anchor of integrated economic activity in that it creates a virtually irreversible aspect of reality as to how economic life is organised, needing something close to a revolution to throw it backwards once again.
This is what happened late 1976 when policy divergence and political mistrust brought down the old East African Community. No lessons from that experience for the EAC we now have?
_0.jpg?itok=QU87XW8D){kind=tracking}
.jpeg?itok=vCj6bCRe)
