The Arusha Conference Calls for Deeper Integration in EAC in the Context of Strengthened Partnership
February 28, 2012
At a conference entitled, “The East African Community (EAC) after 10 Years: Deepening EAC Integration,” sponsored by the Canadian International Development Agency (CIDA) and co-hosted by the Secretariat of the EAC and the International Monetary Fund (IMF) in Arusha, Tanzania on February 27-28, 2012, policymakers of the region reaffirmed their vision for building a strong economic and monetary union that will bring about significant and sustainable improvements in quality of life for a population of more than 130 million.
The conference brought together Finance Ministers and Central Bank Governors from EAC members Burundi, Kenya, Rwanda, Tanzania, and Uganda, as well as from South Sudan, and was held as the EAC enters its second decade. Participants, including senior leaders from governments, central banks, and the private sector, as well as civil society and academia discussed the EAC’s achievements, the benefits of regional integration, and future macroeconomic challenges faced by the region.
“During the last twelve years, EAC has developed the institutions and legal frameworks to promote a viable and vibrant integrated market that is supportive of business investment and growth,” said Dr Sezibera, Secretary General of the EAC.
“We have established a Customs Union and a Common Market which will further deepen regional integration. We are committed to the establishment of the East African Monetary Union (EAMU). In this regard, we recognize the IMF support to the EAMU process through a number of activities at regional level including provision of analytical studies, statistics and technical assistance.
”We are eager to build on the experience of Eurozone countries and other regions with currency unions in designing the EAMU. Early priorities are to develop integrated regional financial capital markets that support capital flows throughout the region. Careful thought is also needed on how to ensure that national fiscal policies and debt management will be supportive of a successful monetary union.
Mr. Naoyuki Shinohara, Deputy Managing Director of the IMF said “We are very pleased with the depth and quality of conference discussions. We have had a candid dialogue with key economic and social stakeholders in East Africa, and this is invaluable, as the EAC is entering its second decade.
“Good progress in regional integration has been made through the launch of customs union and common market projects. These provide scope for countries to achieve greater productivity and competiveness by scaling up their operations in a market of 130 million people.
“At the same time, an important challenge is to further advance the customs union and common market. Important non-tariff trade barriers remain between EAC member countries. Without a truly integrated market, the community is not likely to see the full benefits of improved productivity, competitiveness, and welfare. I am encouraged that Dr. Sezibera has identified removal of non-tariff barriers as a major reform priority for the EAC in 2012.
“A critical question relates to the appropriate pace for moving beyond a common market to monetary union. Certainly, good progress in implementing the customs union and common market will strengthen prospects for a successful monetary union. But the latter also will depend crucially on achieving convergent fiscal, debt, and financial policies. The IMF stands ready to further assist the EAC through analytical work and technical assistance in these areas.”