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.