East Africa takes steps towards stronger financial sector integration
However, fiscal deficits need to be brought down to meet the convergence criteria.While the East African Community (EAC) has made considerable progress on payment systems and financial markets integration, fiscal deficits need to be brought down to meet the convergence criteria and to ensure the stability of the future monetary union, according to experts.
At a conference organised last week by the EAC Secretariat, the European Union, and the International Monetary Fund in Arusha, Tanzania, participants highlighted the high compliance cost due to different regulations in member countries.
In addition, they noted that further progress is needed in data harmonisation and monetary policy frameworks and operations, Tanzania Daily News reports.
To this end, the EAC was encouraged to establish new institutions that will play a key role for the implementation and resilience of the union.
The EA Monetary Protocol was signed in Kampala, Uganda, in November 2013 during the EAC Heads of State Summit.
It has since then been ratified by the five member states of the Community. Its objective is to promote and sustain the East African Monetary Union, a zone of sound monetary policy and prudent fiscal policies to reinforce the monetary policies.