he East African Community Council of Ministers has designated 1st July 2021 as the date for the coming into being of the East African Monetary Institute (EAMI), setting the journey towards the single currency by 2024 as envisaged in the East African Monetary Union Protocol.
The Council at its 40th meeting further directed the EAC Secretariat to convene a Meeting of the Sectoral Council of Finance and Economic Affairs to develop an institutional structure for the EAMI by 30th September 2021.
The Ministers also directed the Secretariat to initiate the process of identifying the Institute’s host Partner State, in accordance with the EAC procedures.
The Council directed the Partner State that will host EAMI to cover office rent, office equipment, utilities and other support for the first two years.
The EAMI is a transitional mechanism to the East African Central Bank that will issue the single currency that is expected to be in place by the year 2024.
The 19th Ordinary Summit of the EAC Heads of State held in Kampala, Uganda on 23rd February 2018 directed the Council to expedite the establishment of the Monetary Institute according to the roadmap of the East African Monetary Union.
At their 20th Ordinary Summit, which was held in Arusha on 1st February 2019, the EAC Heads of State assented to the Bill for the Establishment of the Institute.
On ratification of the African Continental Free Trade Agreement (AfCFTA), the Council urged the Republic of Burundi, the Republic of South Sudan and the United Republic of Tanzania to ratify the African Continental Free Trade Area Agreement (AfCFTA) by 30th June 2021.
As of 21st January 2021, 36 African countries, including Kenya, Rwanda and Uganda, had ratified the AfCFTA Agreement.
The Council also directed the Partner States and the Secretariat to finalize the remaining tariff offers and the EAC Schedule of Commitments on Trade in Services by 30th June, 2021.
The Ministers discussed the Progress Report of the COMESA-EAC- SADC Tripartite Free Trade Area. They urged both the Republic of South Sudan and the United Republic of Tanzania to sign and ratify the TFTA Agreement by 30th June, 2021.
The 40th Council also adopted the 6th EAC Development Strategy (2021/22 – 2025/26). The overall goal of the 6th EAC Development Strategy is to “To Transform the East African Community into a Stable, Competitive and Sustainable Lower-middle Income Region by 2030.”
The East African Monetary Institute (EAMI) is one of the four institutions expected to carry out much of the preparatory work for the creation of the East African Monetary Union.
The other three institutions are the: EAC Financial Services Commission; EAC Surveillance, Compliance and Enforcement Commission, and; EAC Statistics Commission.
It is anticipated that the Monetary Union, the third pillar in the EAC Integration, will be in place in 2024 with the introduction of a common currency and the establishment of a regional central bank. Criteria for the establishment of the Monetary Union include the attainment of macroeconomic convergence criteria, establishment of institutions to support the Monetary Union and harmonization of policies and regulatory frameworks.