Reports Leo Odera Omolo
NEWS emerging from the Ugandan capital, Kampala says Uganda MPs have taken a firm stand and now want East African Community {EAC] partner states to halt the issue of monetary union until “tricky” fundamental issues in the EAC treaty are sorted out first.
The MPs noted that it was useless to fast track the issue of monetary union when the customs union and common market protocols that were passed still have loopholes.
“Some of the principles in the treaty are confusing. We should not rush the issue of monetary union yet other issues like movement of labour and capital are still questionable,” said Betty Ochan (Gulu).
Ochan highlighted contentious principles such as principles of variables, subsidiarity, asymmetry and sovereignty as confusing.
“There is a general lack of sensitization among MPs regarding integration issues. Before we rush things, we need to know where we are heading too,” said Ann Rose Okullu (Bukedea) the chairperson of the EAC Parliamentary Forum.
The group of over 20 MPs were meeting at a Southern and Eastern Africa Trade Initiative and Negotiation Institute (SEATINI) workshop on strengthening the role of MPs in regional integration held in Kampala on Thursday.
Akol said rushing to have a monetary union when some partner states still feared to lose out on their sovereignty is a sham. “How do we deal with issues of imbalanced economic development and land first?” she asked.
Lydia Wanyoto (EALA) said: “Authorities in the partner states have failed to implement the central customs unions that are in the treaty. The challenges are horrendous already due to entry of new states. These are the issues that must be resolved first.”
Jacqueline Amongin (Ngora) noted that when partner states such as Rwanda were still taking Ugandans entering Rwanda as spies, it is pointless to have a monetary union.
Milton Muwuma (Kigulu South) said issues of restricted entry of members of partner states into other states should be ironed out before monetary issues are thought off.
The SEATINI chairperson Prof. Ndebesa Mwambutsya said East African partner states should think and plan regionally and embark sorting issues that are delaying the fast tracking of the customs Union and common market.
Ndebesa said the EAC states should learn from the economic crisis hitting some EU countries before embarking on the monetary and political federation.
“Instead of forming the monetary union that has proved inefficient in the EU, the EAC states should first get grip of the customs union and common market that would provide a right direction on how to undertake other economic issues,” said Prof Ndebesa.
The structural problems that hit some EU countries caused the financial crisis; the imbalances which made some of them running massive trade surpluses like China, Germany, Japan and to a lesser extent the big oil exporters of Russia and Saudi Arabia and some running huge trade deficits like Greece and Italy.
The situation forced investors to remain on edge as eurozone governments struggle to raise funds and given signs that banks are refraining from lending, causing market liquidity to seize up.
The Commissioner Economic Affairs in the Ministry of East African Affairs, Rashid Kibowa said the East African Community Secretariat had launched a series of consultations in the Partner States on the establishment of the East African Monetary Union (EAMU).
“If the partner states don’t unite and harmonize issues, EAC is likely to miss fire,” said Kibowa.
Following the establishment of the EAC Customs Union in 2005, and the ongoing finalization of the negotiations of the establishment of the East African Common Market in January 2010, the next major stage in the East African integration process is the Monetary Union.
The EAC Heads of State have directed that the East African Monetary Union be in place by 2012.
The consultations on the monetary union targeted a broad spectrum of stakeholders such as the National Central Banks (NCBs); Ministries of Finance, EAC Affairs, Planning, Trade, Industry; Capital Markets Authorities; Bureaus of Statistics; Bankers Associations; Academia; Parliamentarians; the Private Sector and the Civil Society.
Ends