Kenya cautioned on EAC monetary union

NAIROBI, KENYA: A parliamentary committee has proposed constitutional amendments to enable the proposed East African Community Monetary Union (EAMU) work.

In its October report, the committee on Regional Integration states that there would be need to amend the Constitution of Kenya to conform to the provisions of the EAMU protocol by the year 2021.

According to the 24-member committee, adoption of the protocol as it stands would lead to Central Bank of Kenya (CBK) losing its constitutional mandate of formulating monetary policy.

Under the Protocol, the EAC partner States are expected to surrender monetary and exchange rates policies to the East African Central Bank leading to a single currency regime within the region, whereas national central banks would remain with the mandate of managing fiscal policy, fiscal discipline and harmonise them with the other Partner States’ national central banks.

The union seeks to enhance trade and investment within the region and ensure increased efficiency, wider market and ease of price comparability, among others.

“The relevant ministries and implementing agencies should aggressively sensitise the public on the provisions of the protocol in line with the tenets of people-centred integration process,” the committee states in its report.

FULLY INVOLVED

Ministries involved are East African Affairs, Commerce and Tourism, Foreign Affairs and International Trade, National Treasury, Parliament and other implementing agencies.

“The Executive should fully involve the House from conception to the ratification process of all regional integration instruments to mitigate against instances where reservations may be introduced during the ratification process by Parliament,” observed the committee chaired Florence Kajuju. It also urges the Ministry of East African Affairs, the Attorney General and all other implementing agencies to expeditiously identify the legal reforms to be undertaken to facilitate proper and timely implementation of the Protocol.

The committee, making its observations following submissions by National Treasury, however, identified low levels of sensitisation of the public and MPs on the Protocol and Customs and Common Market Protocol. “Considering the integration process is a phased process, it will be important to ensure the first two pillars are fully implemented,” the committee advised. It singled out the slow process in implementing the two pillars as a stumbling block.