The 22nd ordinary meeting of the East African Community (EAC) Monetary Affairs Committee (MAC) was held at Kampala Serena Hotel in Uganda on 24th August 2018. The meeting was chaired by Prof. Emmanuel Tumusiime-Mutebile, Governor of the Bank of Uganda, and current chairperson of MAC.
Present were: Dr. Patrick Njoroge, Governor of the Central Bank of Kenya, Prof. Florens Luoga, Governor of the Bank of Tanzania, Hon. Dier Tong Ngor, Governor of the Bank of South Sudan, Dr. Monique Nsanzabaganwa, Deputy Governor of the National Bank of Rwanda, Dr. Louis Kasekende, Deputy Governor of the Bank of Uganda, Mr. Vénuste Ndikumwenayo, representing the Governor, Bank of the Republic of Burundi and Mr. Kenneth Bagamuhunda, representing the Secretary General of the EAC Secretariat.
The meeting reviewed progress towards the operationalization of the East Africa Monetary Union (EAMU).
Governors reflected on the Road map for the EAMU and the set timelines therein. Governors also reviewed status of implementation of decisions of the 21st Ordinary MAC meeting held in Kampala, Uganda on 24th August, 2017.
Governors noted that significant progress has already been made towards the operationalization of the EAMU Protocol. Partner States’ Central Banks have made strides on harmonization of: monetary policy frameworks, exchange rate policies, rules and practices governing bank supervision, financial accounting principles, as well as payment systems.
“A number of national laws are also being harmonised. In April 2018, the East African Legislative Assembly (EALA) enacted the bill establishing the East African Monetary Institute (EAMI). The EAMI bill now awaits assent by the EAC Heads of State,” the Governors said in a joint communiqué.
“Notwithstanding the above, Governors noted that there have been delays in realising targets set out in the EAMU road map and that there are several challenges that could further impede the full implementation of EAMU protocol. Governors therefore pledged to collaborate with stakeholders in the EAC integration process to fast track pending activities of the EAMU road map,” they added.
Governors noted the recent global developments including the escalating trade tensions, tightening financial conditions, strengthening of the US Dollar and rising commodity prices and their potential impact on the EAC economies.
Normalisation of monetary policies in some advance economies and the associated rise in interest rates, coupled with escalating trade tensions pose risks for macroeconomic stability as well as overall economic growth in the region.
Partner States’ Central Banks reiterated the need to remain vigilant in identifying and building resilience to shocks arising from the recent global developments.
They also underscored their commitment to enhancing coordination of fiscal and monetary policies to boost our capacity and preparedness to withstand economic shocks.