IMF to support EAC monetary union
ARUSHA, Tanzania, November 25, 2010/African Press Organization (APO)/ — The International Monetary Fund (IMF) Senior Resident Representative to the United Republic of Tanzania, Mr. John Wakeman-Linn has disclosed that the IMF will provide all the necessary support to the East African Community (EAC) in its quest to establish the regional Monetary Union.
Mr Wakeman-Linn, who paid a working visit to the EAC Headquarters today and met with the Secretary General Amb. Juma Volter Mwapachu affirmed that IMF was keenly following the EAC integration process and the move towards the monetary union. He pledged to bring on the table his wealth of experience from West Africa and European Union, where the IMF played a pivotal role in the merger of these regions’ economies and the formation of the Monetary Unions.
“We shall support any programme that is aimed at strengthening the regional integration process and this is not a shift in policy of supporting national economies, it is because the Fund is now interested in supporting both regional and national programmes aimed at economic development,” he said.
“I will be more than happy to sit with the EAC officials to identify further areas in which we can cooperate and we are ready to provide assistance in any way you want it,” he noted.
Amb. Mwapachu reiterated that support is very much needed to support the EAC implement the recommendation made by the European Central Bank (ECB) report released early this year, detailing the viability of a monetary union in East Africa. He noted that the ECB team had indicated that adequate foundation needed to be crafted including the setting up of a legal and institutional framework for the proposed monetary union.
“The essential preparations such as the setting up the legal and institutional framework cannot be completed, nor the capacity built to enable East African Monetary Union (EAMU) to function without substantial efforts to recruit, train and retain suitable staff, and to provide the necessary material resources,” he said, adding that “this is when IMF comes in handy”.
He said some prerequisites for the establishment of the EAMU include convergence across the single currency area, including growth domestic product (GDP) growth rates, inflation rates, exposure to external shocks, public finance, balance of payments, interest and exchange rates.
“We cannot do without support from the IMF to support us solve some of these issues that are related to the progress towards the achievement of the Monetary Union,” he said.
Amb. Mwapachu affirmed the ground has already been set for negotiations on the Monetary Union and the Partner States would soon embark on the negotiations. He said High Level Task Force to start the negotiations has already been formed and the process has the strong backing of EAC Central Bank Governors.
The EAC Deputy Secretary General in charge of Planning and Infrastructure, Mr. Alloys Mutabingwa, the Principal Economist (Fiscal and Monetary), Mr. Tharcisse Kadede and the Principal Planning and Research Officer, Mr. David Sajjabi accompanied the Secretary during the talks with the IMF official.
SOURCE
East African Community (EAC)
