Rwanda has secured parliament’s commitment to pass the EAC Monetary Union Protocol ratification law this month, putting the country ahead of its regional peers in the implementation of the protocol signed by heads of state in Uganda in November.

Tanzania and Rwanda have made the biggest steps so far among their EAC peers in ratifying the protocol on the monetary union as the clock ticks towards the July deadline.

While Tanzania expects to ratify the protocol early next week, Uganda, Burundi and Kenya are in the process of ratifying the crucial protocol but were non-committal on the execution date. Tanzania’s Deputy Minister for EAC Co-operation Dr Abdallah Saadalah said the national parliament in Dodoma would approve the protocol on June 9.

“Parliament is scheduled to sanction the EAC Protocol on Monetary Union on June 9, 2014,” Dr Saaadalah told The East African.

Rwanda’s Finance Minister Claver Gatete secured parliament’s go-ahead on the protocol after pleading with the House to approve the ratification without subjecting it to the rigorous processes of parliamentary standing committees.

Although the request was not granted, MPs gave a guarantee that the law would be passed in the course of the month. “We need the protocol ratified by July 1 this year. We need to ready ourselves,” Mr Gatete toldThe EastAfrican after his presentation.

Jean Marie Gatabazi, of the ruling Rwanda Patriotic Front (RPF) party, however asked: “The Euro zone has been struggling due to a recent financial meltdown… part of the problems originate from fiscal indiscipline. Are we ready?”

The minister however said Rwanda’s inflation, debt and deficit levels are within the correct ranges and that his ministry has been sending out its staff to older economic zones to benchmark best practices on how to manage the transition. “Because this discipline has to be consistent is the reason we need to ratify the protocol,” said Mr Gatete in his submissions to parliament. “Member states that do not comply will be penalised, and I think none of us desires that.”

Uganda’s Minister for EAC Affairs, Shem Bageine, said his country has initiated the process to ratify the protocol but that, since the regime requires a constitutional amendment, it would be considered by a number of state organs. “This particular ratification calls for a constitutional amendment since, at some point, it will need the central bank to cede its powers to the proposed EA Central Bank; that’s why it has taken time,” Mr Bageine told The EastAfrican.
Burundi is also in the process of sanctioning the regime but its Minister for EAC Affairs Léontine Nzeyimana was not specific on the date, as was case with Kenya.

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

The move towards deeper economic integration in the bloc has gained new impetus with the signing of the EA Monetary Union Protocol at the 15th Ordinary Summit of EAC Heads of State in Kampala on November 30 last year.

The EAMU Protocol is a milestone outlining a 10-year road map towards a single currency for the region by 2024. To facilitate commencement of its implementation, the partner states are expected to conclude the ratification by next month.

The road map for the realization of the Monetary Union envisages harmonization and co-ordination of fiscal policies of the partner states and that macroeconomic convergence will be achieved and maintained at least three years prior to the adoption of a single currency.

In this regard, the Committee on Fiscal Affairs has identified fiscal policy areas requiring harmonization in the context of EAMU, which have already been adopted by the Sectoral Council on Finance and Economic Affairs.

According to EAC spokesperson Owora Richard Othieno, areas identified for harmonization include co-ordination of budget processes and harmonization of tax policies and laws.

Source: The East African

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