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http://online.wsj.com/news/articles/SB10001424052702303332904579230004056818752
KAMPALA, Uganda—Heads of state in East Africa on Saturday signed a monetary-union deal, setting the clock on a 10-year timeline for the establishment of a regional single currency.
The agreement, reached at the lakeside resort of Munyonyo in Kampala, came after nearly a decade of talks. Kenya, Uganda, Tanzania and Rwanda will now try to establish institutions—including a regional central bank and a statistics body—to support the single currency.
The deal marks an important touchstone in the region's transition from a collection of conflict zones to one of the world's most promising destinations for investment.
"East African community is now fully embarked on enormous, ambitious and transformational initiatives for our people," said Uhuru Kenyatta, Kenya's president and new head of the regional block. "The promise of prosperity and economic development hinges on soundness of our integration."
After establishing the Customs Union in 2005, and the Common Market in 2010, East African countries have reached the third stage toward a united political federation: the Monetary Union Protocol.
But experts have also voiced concerns. "There remain a number of uncertainties about whether these countries can fully put in place a monetary union," said Oswald Leo, an economist at the East African Development Bank.
With a total population of about 135 million people, East Africa is becoming an investment magnet following a flurry of natural-gas and oil discoveries. Uganda and Kenya have discovered huge amounts of oil, while Tanzania boasts of huge natural-gas reserves. International companies have already started exploiting these resources, and the region is poised to become the next major energy hub in Sub Saharan Africa.
Member states will also establish the East African Monetary Institute, which will take charge of all the monetary and exchange-rate policies, while the statistics body will produce regular inflation figures to guide price stabilization.
In October, Uganda, Kenya and Rwanda signed a Single Customs Territory deal, allowing free movement of goods and services across their borders. They have also signed a number of infrastructure deals to put in place regional oil pipelines and a crossborder railway line, rattling Tanzania and Burundi. Early this week, Tanzania demanded that the deals be reviewed to be given a regional appeal.
"This separate coalition poses the risk to disintegrate the community rather than integrate it," said Samuel Sitta, Tanzania's minister in charge of the East African Cooperation.
Shem Bagaine, Uganda's minister in charge of the East African Community, said that all member states including Tanzania "have reaffirmed" their commitment to the integration following the heads-of-state summit in Kampala.
KAMPALA, Uganda—Heads of state in East Africa on Saturday signed a monetary-union deal, setting the clock on a 10-year timeline for the establishment of a regional single currency.
The agreement, reached at the lakeside resort of Munyonyo in Kampala, came after nearly a decade of talks. Kenya, Uganda, Tanzania and Rwanda will now try to establish institutions—including a regional central bank and a statistics body—to support the single currency.
The deal marks an important touchstone in the region's transition from a collection of conflict zones to one of the world's most promising destinations for investment.
"East African community is now fully embarked on enormous, ambitious and transformational initiatives for our people," said Uhuru Kenyatta, Kenya's president and new head of the regional block. "The promise of prosperity and economic development hinges on soundness of our integration."
After establishing the Customs Union in 2005, and the Common Market in 2010, East African countries have reached the third stage toward a united political federation: the Monetary Union Protocol.
But experts have also voiced concerns. "There remain a number of uncertainties about whether these countries can fully put in place a monetary union," said Oswald Leo, an economist at the East African Development Bank.
With a total population of about 135 million people, East Africa is becoming an investment magnet following a flurry of natural-gas and oil discoveries. Uganda and Kenya have discovered huge amounts of oil, while Tanzania boasts of huge natural-gas reserves. International companies have already started exploiting these resources, and the region is poised to become the next major energy hub in Sub Saharan Africa.
Member states will also establish the East African Monetary Institute, which will take charge of all the monetary and exchange-rate policies, while the statistics body will produce regular inflation figures to guide price stabilization.
In October, Uganda, Kenya and Rwanda signed a Single Customs Territory deal, allowing free movement of goods and services across their borders. They have also signed a number of infrastructure deals to put in place regional oil pipelines and a crossborder railway line, rattling Tanzania and Burundi. Early this week, Tanzania demanded that the deals be reviewed to be given a regional appeal.
"This separate coalition poses the risk to disintegrate the community rather than integrate it," said Samuel Sitta, Tanzania's minister in charge of the East African Cooperation.
Shem Bagaine, Uganda's minister in charge of the East African Community, said that all member states including Tanzania "have reaffirmed" their commitment to the integration following the heads-of-state summit in Kampala.
