Tanzania is the only member state to ratify the East African Monetary Union Protocol within deadline after it completed the process in June.

In Rwanda, the ratification is being debated in the Senate, having been approved by the lower House, after the country missed the July 1 deadline alongside Uganda, Kenya and Burundi. 

Uganda’s EAC Affairs Minister Shem Bagaine would not specifically say when they would ratify the protocol, only saying taking away the powers of the central bank will require a constitutional amendment.

“Bank of Uganda is a creation of the Constitution and, if we are to ratify a protocol that takes away its powers, we have to go through parliament,” he said.

Ordinarily, ratification of protocols in Uganda is done by the Cabinet, which allows for quick decisions. But in the case of EAMU, Mr Bageine said parliament will have to participate in the process, warning that it could take some time before it is adopted.  

Kenya hopes to ratify the Monetary Union Protocol this month, although there are fears of further delays. Peter Njoroge, Director of Economics at Kenya’s Ministry of East African Affairs, Commerce and Tourism, said the matter is before the Cabinet.

“How fast it will be ratified depends on the attention it is given,” he said. “It is not a simple process because after the Cabinet, it will be taken to parliament for approval.
“We are however optimistic we will meet the July deadline.”

Burundi’s Minister for EAC Affairs Léontine Nzeyimana was also not specific on the date, despite an earlier commitment to the July deadline.

“Burundi is in the process of ratifying the Monetary Union Protocol,” Ms Nzeyimana had told The EastAfrican in an earlier interview. “We will beat the July deadline; that’s what I can tell you.”

In the drive towards a common currency, East African Community member states aim to harmonise monetary and fiscal policies and establish a common central bank. As a first to achieving the goal, Kenya, Uganda, Tanzania and Rwanda nowadays present their budgets simultaneously every June.

Economists say the establishment of the EAMU will help the region to attract more foreign investment and wean it off dependence on foreign aid.

Tanzania announced it will move to the next stage, which is streamlining its economy to the requirements of the Protocol. Ministry of East African Co-operation’s acting Director, Trade, Investment and Production, Bernard Haule, said the Bank of Tanzania and the Ministry of Finance would ensure the country meets the convergence criteria for the 2024 regional single currency deadline.

Mr Haule said the government was keen to ensure control of inflation and reduction in the budget deficit, two of the key criteria for EAMU admission.

“Tanzania will implement the criteria for the monetary union during the 10-year grace period,” Mr Haule said. “But meeting the outlined criteria is only possible if we develop our economy.”

However, Dr Honest Ngowi, a senior economics lecturer at Mzumbe University, said rising inflation and lack of noticeable efforts to deal with the budget deficit were likely to hinder the country from meeting the convergence criteria.

Kenya and Uganda have also been struggling with increased budgetary deficits and the International Monetary Fund has warned the two over it.

By Scola Kamau, Dicta Asiimwe, Eric Kabendera and Christabel Ligami