The economic community of central african states eccas was created in 1983 as part of the lagos plan of action, adopted by the organisation for african unity oau to promote the establishment of a single pan african common market by the year 2000. Protocol on the establishment of the east african customs. The west african economic and monetary union, for one, was formed in 1994 and shares the cfa franc among eight west african countries, while namibia, swaziland, and lesotho have been linking their currencies to the south african rand under a common monetary area established in 1986. Monetary institute for the region as an interim step leading to a monetary union. Dec 20, 2016 monetary unions and common currency areas are not new to africa. Single currency plans for east african community under way. Discusses single free trade area and merger of the three regional blocs. The organisation was founded in 1967, collapsed in 1977, and was revived on 7 july 2000. Comesa is also work ing toward a monetary union by 2025, but progress in the prerequisite macroeconomic conver. Dr albert musisi, the commissioner in charge of macroeconomic policy in the ministry of finance, said the move would help the country meet the fiscal deficit target of three per cent. East african nations agree on monetary union news al. On november 30, 20, the heads of state of the east african community signed the monetary union protocol in kampala. The eac customs union protocol came into force in 2005 and the implementation of the common market protocol commenced in 2010.
This is to enhance the efficiency and performance of the custom union and the common market. Paul kagame, the president of rwanda, is the eacs chairman. Considering the constitutive act of the african union and the treaty establishing the african economic community, as well as the charter of the united nations. Considering that the constitutive act of the african union established the african monetary fund in its article 19c. The eac journey to a monetary union began with the establishment of the east african monetary union in 2015, which provided a roadmap to achieve a single currency region within 10 years by 2024. Further considering the treaty establishing the african economic community, adopted in abuja, nigeria, in june 1991. Central african economic and monetary community cemac. Protocol relating to the establishment of the peace and security council of the african union we, the heads of state and government of the member states of the african union.
It is the strategic framework for delivering on africas goal for inclusive and sustainable development and is a concrete manifestation of the panafrican drive for unity, selfdetermination, freedom, progress and collective prosperity pursued under panafricanism and african. Use the link below to share a fulltext version of this article with your friends and colleagues. Protocol on the establishment of the east african customs union, 2004. Section 3 states the problem that the decision to set up a monetary institute in the sadc region is political and that the sadc integration process is not clear in terms of where the region is heading. On 30th november 1999, the treaty of the establishment of eac was signed and on 7th july 2000, it became operational. Toward a monetary union in the east african community. Executive summary on 1 january 1999, the euro became the single currency of eleven eu member states, thereby replacing the different national currencies at the respective irrevocably fixed conversion rates. On november 30, 20, the heads of the east african community eac member states signed the monetary union eamu protocol in kampala. Monetary union is where two or more countries achieve macroeconomic convergence, stable and harmonise exchange rates systems, liberalise capital and current accounts transactions and adopt marketoriented approaches to the conduct of monetary policy. The east african monetary union eamu is the third milestone of the eac integration process.
Pdf a literature survey on proposed african monetary unions. Background to the east african community eac the east african community eac is the regional intergovernmental organization of the republic of burundi, kenya, rwanda, tanzania and uganda with headquarters in arusha, tanzania. A full monetary union involves a single currency and central bank. Regional integration and monetary unions in africa how. The east african community eac is a unique regional entity that was established in 2000 with a clear road map for establishing a customs union, common market, monetary union, and, ultimately, a political federation. Annex v11 treaty for the establishment of the east african community arusha, 1999 annex v12 agreement establishing the intergovernmental authority on development. The east african community eac is an intergovernmental organisation composed of five countries in the african great lakes region in eastern africa. The eamu protocol was adopted in accordance with the eac treaty and signed on 30th november 20. Republic of cameroon, the central african republic, the republic of the congo.
Annexes to chapter vi annex vi1 southern africa customs union agreement pretoria, 1969. According to article 5 of the treaty establishing the eac, the integration is anchored on four major pillars. Toward a monetary union in the east african community african deparment. Establishment of the east african customs union, the protocol on science, technology and innovation. It is intended to provide a followup to the 2012 regional.
African monetary zone wamz, east african monetary union eamu, southern african monetary union samu and african monetary union amu. Convinced that cooperation at the subregional and regional levels in. Monetary and exchangerate agreements between the european. The plan is for the monetary unions to merge to form an african wide currency union with one central bank and african currency. Eac enters into the consolidation phase of the integration process. East africa economic outlook 2019 african development bank. The monetary union eamu protocol is the third pillar of eac integration. In late 20 the east african community eac countries burundi, kenya, rwanda, tanzania, and uganda signed a joint protocol setting out the process and convergence criteria for an eac monetary union. East african community eac close afrika mashariki road p.
The road to monetary union in east africa share this blog post on 30 november, the heads of state of the partner states of the east african community burundi, kenya, rwanda, tanzania and uganda met in kampala to approve the protocol for the establishment of an east african monetary union. The influence of east african community customs union on. A literature survey on proposed african monetary unions. This study provides a survey of recent advances in the literature on proposed african monetary unions.
East african community partner states are in the process of finalising policies to attain a single currency for the region by 2024 as outlined in the eac monetary union protocol. A politicolegal framework for integration in africa. Since 1975, the waemu member states created with seven others west african states cape verde, gambia, ghana, guinea conakry, liberia, nigeria and sierra leone the economic. Common market for eastern and southern africa comesa also has a monetary union objective with its own time table to achieve this. However, several regional monetary union projects are planned such as ecowas, comesa, sadc and eac and a common currency for africa is a longterm goal of the african union. Economic community of west african states wikipedia. The east african community eac is an intergovernmental organisation composed of six countries in the african great lakes region in eastern africa.
Establishing monetary union in the sadc region is one of the ultimate goals of the sadc. Collection centre 1900, the east african currency board 1905, the postal union 1905, the court of appeal for eastern africa 1909, the customs union 1919, the east african governors conference 1926, the east african income tax board 1940 and the joint economic council 1940. In 1994 was created the west african economic and monetary union waemu by seven west african countries using the cfa franc common currency. East african community regional pharmaceutical manufacturing plan of action 20122016 poverty impact assessment of the east african community regional pharmaceutical plan of action eac regional intellectual property policy on the utilisation of public healthrelated wtotrips flexibilities and the approximation of national intellectual. Burundi, kenya, rwanda, south sudan, tanzania, and uganda. East african currency board and postal union 1905, court of appeal 1909. The protocol on the establishment of the east african community common market the common market protocol was signed in arusha, tanzania by the republic of kenya, uganda, rwanda, burundi and the united republic of tanzania, on the 20 november 2009 pursuant to articles 22, 52, 151 1, 76 and 104 of the treaty for the. Tanzania, kenya and uganda are determined to merge their respective shillings with rwanda and burundian francs to form the single legal tender for the bloc in the next seven years. The protocol lays groundwork for the process, the prerequisites.
This will serve to transform the east african economy to operate with a common currency by 2024. The east african community eac has failed to meet its 2012 target of agreeing on the formation of a monetary union. The major benefits of a monetary union are the reduction in transaction costs, economies of international reserves, the elimination of exchange rate risk and regionwide. Full political con federation 20 wako committee, 2004. This institution is one of the three financial institutions of the future african union. And whereas provision was made by the east africa high. The proposed institute will carry out the preparatory work that will guide the region towards formation of an east african monetary union and its supporting institutions. The bank of central african states beac is an african international institution governed by the convention establishing the monetary union of central africa umac, the monetary cooperation convention concluded between france and the six member states of the umac. A gppp analysis to the eac monetary integration process. The eac has now concluded the protocol for the establishment of the east african. The africa monetary fund is a planned african union financial institution, though in time its responsibilities will be transferred to the african central bank. Pdf a common currency for the east african community. Establishment of single currency usually results from achievement of full monetary union.
The east african monetary union ministry of east african. Challenges in meeting the convergence criteria for monetary union 1. Memorandum on the protocol for the establishment of the east african community monetary union introduction the heads of state of the east african community signed a protocol on the establishment of the east african community monetary union on 30th november 20. Since the protocol provides for the east african central bank eacb to be independent of the governments, have 1. Such a union would call for the creation of a new unified currency, similar to the euro. Establishing a monetary institute for the region as an. Benin, burkina faso, ivory coast, mali, niger, senegal, and togo. This protocol also features the statute of the east african monetary institute and the east african central bank.
Feasibility and implication of east african community monetary union. Towards a common currency in the eastern african community. The eac is approaching the highest stage, having ratified the protocol for a monetary union, but igad is farther behind. The protocol establishing the east african monetary union was signed by the eac. Definitions in this protocol, unless otherwise specifically stated. In late 20 the east african community eac countries burundi, kenya, rwanda, tanzania. One such regional bloc is the east african community eac. Nov 30, 20 kampala reuters the leaders of five east african countries signed a protocol on saturday laying the groundwork for a monetary union within 10 years that they expect will expand regional trade. Interest in monetary and economic integration in the region is high due to the numerous benefits that accrue to currency union members countries. Europe worked hard to consolidate its single market and achieve a high. Feasibility and implication of the east african community monetary union. Pdf on jan 1, 2018, hansheinrich bass and others published a common. Overview of education sector east african community. Monetary union eamu protocol was signed in november 20.
Considerations for south sudan joining the east african. The east african monetary union protocol provides for the attainment of a single currency for daily. Agenda 2063 is the blueprint and master plan for transforming africa into the global powerhouse of the future. Secondly, a monetary union among all eastern or southern african countries seems infeasible at this stage, since a number of countries suffer from the effects of civil conflicts and drought and. Establishment of the east african community common market 1. It is necessary to ensure the existence of adequate pre. The above strands in the literature have not been structured to present a holistic. Eacs journey to monetary union still on right speed. The customs union was formally completed in 2010, and common market protocol was signed in 2009.
East african trade bloc approves monetary union deal reuters. Corden 1972 distinguishes, in this regard, between pseudoexchange rate unions,and complete exchange rate unions. The same is true of they argue that the structural characteristics of african enhanced riskpooling through the financial system. Already, uganda has announced plans to reduce investment in infrastructure in the runup to joining the east african monetary union in 2024. Protocol on the establishment of the african monetary fund. The promise and efficacy of the east african community advocates. When the east african community eac was revived in 1999, more than million citizens of the region expected it to fully tap into the benefits of a rejuvenated economic and political bloc. Monetary union is the third of the four pillars in the eacs ambition towards regional confederation. South sudan will also lose its relatively valuable pound, melting jubas. South sudan, the eac and east african monetary union. I n t e r n a t i o n a l m o n e t a r y f u n d the african department toward a monetary union in the east african community asymmetric shocks, exchange rates, and risksharing mechanisms. Draft protocol on amendments to the protocol on the statute of the african court of justice and human rights as at thursday 15 may 2014 african union union africaine uniao africana addis ababa, ethiopia p. Eac peace and security protocol eac customs union protocol eac common market protocol eac monetary union protocol. Common market protocol opens the free movement of capital to any person.
Protocol for the establishment of the eac monetary union signed. East african business council eabc ninth floor, mafao house old moshi road p. Making the most of the common market on the road to a monetary union is being jointly organized by the east african community eac secretariat, the european union eu delegation in tanzania, and the african department of the international monetary fund imf. Pdf design and implementation of a common currency area in.
Firmly convinced that the attainment of the objectives of the african union requires the establishment of the african monetary fund, have agreed as follows. The highlevel conference on regional integration in the eac. To achieve these objectives, the key building blocks are the customs union, common market, monetary union, and ultimately the political federation. The leaders of five east african countries signed a protocol on saturday laying the groundwork for a monetary union within 10 years that they expect will expand regional trade. Apr 29, 2016 africa has a longer history of monetary unions than europe, but the large size of the european monetary union emu and the challenges it has faced since the 20082009 financial crisis, provides important lessons for both existing and proposed monetary unions in africa. The survey comprises about 60 empirical papers published during the past fifteen years. Facilitation of transport and trade in subsaharan africa. The heads of state of the east african community signed a protocol on the establishment of the east african community monetary union on 30th november 20. While the abuja treaty continues to set the overall framework and ambition for african integration, the. Hence, corresponding policy implications from the plethora of studies may also vary depending on contexts.
The east african monetary union eamu protocol was signed on 30 th november 20. The eac aims at deep economic, social, and political integration, starting with a customs union and moving on to a common market, a monetary union, and ultimately a political federation among the five member states. In november 20, the partner states of the east african community eac endorsed the protocol on the establishment of the east african community monetary union the protocol committing them to full monetary union by 2024. Free movement of capital and east african monetary union jstor. In 20, eac adopted the protocol establishing the east african monetary union which sets out the process and criteria for harmonising monetary and fiscal policies, establishing a common central bank and replacing the national currencies of its member countries with a. Years of anxiety within the regions fi nancial circles have now come to an end, paving the way for the process of implementing what promises to change the face of east africa. Background to the east african community eac and key. The eamu protocol was signed on 30th november, 20 and set the groundwork for a monetary union within 10 years while allowing the eac partner states to progressively converge their currencies into a single currency in the community. Protocol on the establishment of the east african monetary union. The arrival of the euro widens monetary unions in africa. The customs union is the first regional integration milestone and critical foundation of the eac.
East african community eac states are aspiring for a single eac currency by 2024. Introduction the east african community eac reemerged in 2000 after the ratification of the eac treaty signed earlier in 1999 by member states of kenya uganda and tanzania. The signing of the protocol represents a further step. Eac partner states established a customs union in 2005, a common market in 2010 and signed the east african monetary union eamu protocol in 20 and are progressing towards implementation of the monetary union protocol, and ultimately a political federation of the east african partner states. The euro zone and both of the cfa franc zones would be examples of full. Understanding the east african community and its transport. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext. Towards a common currency in the east african communityeac. West african monetary integration and interstates risksharing. Pdf the east african community eac has fasttracked its plans to. Exploring the attainability of a supranational african union. The east african monetary union eamu is an important stage in the process of east african community eac regional integration. This is in line with articles 52, 82 and 151 of the treaty for the establishment of the east african community, whose goal is the eventual establishment of a political federation. The central african economic and monetary community cemac was created in 1994 and became operational after the treatys ratification in 1999.
After almost two years of negotiations, the five east african community countries appeared to be reaching agreement on how an east african monetary union will be formed and it was expected that a protocol would be approved at the eac heads of state summit at the end of november. It follows ratification of the protocols for a customs union 2005 and. Ea2564 preamble the member states of the african union. Currently the intention is to sign the east african monetary union protocol 2012, while the date for actual implementation of the common currency is uncertain.
The east african monetary union eamu is the third stage in the eac integration process after formation of the customs union in 2005 and a common market in 2010 and will ultimately lead the fivemember bloc adopting a single currency regime. It has since been ratified by all the partner states. Southern african development community monetary union. The east african community eac was originally founded in 1967 by kenya, tanzania and uganda. African economic and monetary union including setting up of african monetary union, a single african central bank and a single african currency. The african monetary union is the proposed creation of an economic and monetary union for the countries of the african union, administered by the african central bank. Treaty on the west african economic and monetary union waemu the text of the treaty establishing the west african economic and monetary union waemu is reproduced below. Currently, two monetary integrations in africa are in place.
Protocol on the statute of african court of justice and human rights, 2009. A memorandum of understanding for currency convertibility has since been signed, and fiscal, monetary. In order to promote the objectives of the community provided for under article 5 of the treaty and in accordance with the provisions of this protocol, the partner states hereby establish a common market as an integral part of the community. The five east african community eac countries on november 30th signed a protocol to establish a monetary union, in a first step towards creating a single currency. Indeed, these proposed monetary zones are fostered as building blocks for an eventual african monetary union, an ideal of the african union masson and pattillo, 2004. In september 2018 a committee was formed to begin the process of drafting a regional constitution, and a draft constitution for a. Kenya, tanzania, uganda, rwanda and burundi will merge currencies gradually over the next ten years to boost trade. The west african economic and monetary union also known as uemoa from its name in french, union economique et monetaire ouestafricaine is an organisation of eight, mainly francophone west african states within the ecowas, that were dominated otherwise by anglophone heavyweights like nigeria and ghana. Therefore, the east african monetary union eamu is a necessary step towards a more stable. The consolidation of benefits is in no way based on the assumption that. An economic integration zone for the east african community. Eac eyes single currency by 2024 trademark east africa. Aug 08, 2017 launching a single currency will also require creating and empowering new regional institutions, such as the west african central bank, to manage or supervise monetary policy for the member countries. The east african community common market and possible monetary union customs union and cet 2005 full implementation 2010 single market 2010 full implementation 2015 protocol for monetary union 20 implementation by 2024.
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