East African Community
The government has said that Tanzania's ratification of the East African Community (EAC) Monetary Union Protocol on June 25th 2014 demonstrates that the country is not a stumbling block to regional integration.
The Deputy Minister for East African Cooperation Hon. Dr Abdulla Saadalla said in Dodoma that Tanzania became the first country to endorse the instrument, making a big step ahead of its EAC peers.
"We have made a huge step and demonstrated our commitment to EAC regional integration. We are not by any means a stumbling block to the regional integration," Dr Abdulla Saadalla said.
The next step is to dispatch the instrument of ratification to the EAC Secretary General by the Clerk of Tanzanian National Assembly as required by the Treaty for establishment of East African Community.
During debate on the Protocol, majority of Members of the Tanzania National Parliament said it was the right time to enter into the third stage of EAC integration process as Tanzania is closer and thriving to lead in macro-economic convergence criteria.
Dr. Saadalla said some Members of the Tanzania National Parliament had reservations on the ratification of the Protocol especially due to geo-politics dynamism and creation of the so called Coalition of the Willing (CoW), but economic indicators convinced them that the country was on right track to economic supremacy.
"We are consistent in our commitments to meet and maintain all macro-economic convergence criteria stipulated in the Protocol. We are reaping the benefits of sound economic policies no wonder we are among the top ten countries in Africa with an average of 7% GDP growth per annum," Deputy Minister added.
Dr. Saadalla noted the members of Parliament were also convinced by the output generated by the government's newly created strategy-Big Results Now (BRN).
The East African Monetary Union is the third stage of EAC integration and will ultimately lead the five-member bloc to adopt a single currency regime by 2024.
The Protocol establishing the East African Monetary Union was signed by the EAC Heads of State on 30 November 2013, in Kampala Uganda during their 15th Ordinary Summit.
The Protocol provides for a wide scope of co-operation in the monetary and financial sectors among the Partner States.
Under the Protocol, the EAC partner States are expected to surrender monetary and exchange rates policies to the East African Central Bank leading to a single currency regime within the region, whereas National Central Banks will remain with the mandate of managing Fiscal policy, Fiscal discipline and harmonize them with the other Partner States' National Central Banks.
The Protocol will be implemented over a ten year period, subsequently leading to creation of regional financial institutions whose mandate will be to stabilize financial prices as well as monitoring, surveillance, statistics and enforcing compliance of all other macro finance matters, including buffering of any emerging economic shocks.
Dr. Saadalla said the Union will eliminate the costs attendant to juggling different currencies thereby reducing transaction costs and minimizing inflation in the region, thus creating an economically stabilized region with a conducive environment for Direct Foreign Investment and therefore uplifting the economic standard of its people.
