Eala approves key Bill, but challenges remain

Arusha. The crucial bill for the desired single currency economy in East Africa has finally been passed.

However, the hurdles remain as the one currency dream for the region is not likely to be perfected too soon. The East African Legislative Assembly (Eala) gave the legal document a clean bill of health yesterday without an anticipated long debate.

The lawmakers were optimistic the EAC Financial Services Commission Bill, 2022 was key for one pillar of regional integration.

“It now awaits assent by the Heads of State. This is a milestone,” Eala Speaker Martin Ngoga told The Citizen as the House adjourned at midday.

The outgoing Rwandan lawmaker said he knew the Bill would sail through smoothly “as it was brought in by the partner states”.

Once assented, the legislation will be tasked to put into gear instruments needed for an integrated financial system in the region.

The EAC Financial Services Commission Bill, 2022 will pave the way for establishment of a fully fledged institution under the East African Community (EAC).

The creation of the Commission is pursuant to Article 21 (a) of the Protocol on the establishment of the East African Monetary Union (Eamu).

The proposed body would promote the attainment of the macroeconomic convergence criteria for all the partner states during the transition to the Monetary Union.

The protocol for the  EA Monetary Union was signed in November 2013 in Kampala, Uganda and has been ratified by the five partner states then.

Despite the optimism displayed by the members of the outgoing 4th Assembly yesterday, the proposed Commission may as well be delayed.

Regional analysts have cited scarcity of resources as among reasons why the EAC was not keen to establish more institutions.

The seven-nation organisation currently has nine institutions scattered across the region besides the three organs based in Arusha.  Some of them like the Zanzibar-based East African Kiswahili Commission (EAKC) are reported to be in financial distress.

During Eala’s recent sitting in Kigali, Rwanda, some MPs called on the EAC to halt creation of more institutions without a guarantee of resources to run them. They said the current system of financing the EAC organs and institutions was not sustainable in the wake of resource constraints facing the Community.

The MPs were debating the EAC Surveillance, Compliance and Enforcement Commission Bill, 2022 which will also see the establishment of another EAC institution.

Another likely doubt that the proposed Financial Services Commission will be rolled out too soon emerged two weeks ago.

A senior official of the EAC Secretariat revealed that tentatively the launching of a single currency has been pushed to 2031 from 2024.

The decision by the technical experts was approved by the EAC Council of Ministers during their routine meeting in Arusha last month.

Dr Pantaleo Kessy, a monetary expert, said most partner states were yet to meet a host of crucial benchmarks for a single currency economy.

The single currency arrangement was to be preceded by the creation of the East African Monetary Institute (EAMI) whose bill was passed some years ago. EAMI would later be transformed into the East African Central Bank that would issue the single currency.

However, the proposed institute has not been created despite all the partner states having nodded to its creation since last year.

The Bill for its creation has not only been passed by the regional Assembly but has been assented by all the partner states.

EAMI would later be transformed into the East African Central Bank that would issue the single currency.

However, as it awaits creation, a debate is going on which of the seven member states in the bloc would host it.