East Africa’s monetary goal undaunted by euro woes

* Euro woes a lesson in debt management

* Common market on schedule

By George Obulutsa

NAIROBI, May 24 (BestGrowthStock) – East African Community, a
five-nation trade bloc that aims to have a monetary union in
2012, said on Monday that problems in the euro area will serve
as a lesson but will not discourage its move to a single
currency.

East African Community (EAC) comprises Uganda, Kenya,
Tanzania, Uganda and Burundi. It already has a customs union,
and a common market is due to take effect in July. After the
monetary union, it eventually aims to have a political
federation.

Juma Mwapachu, EAC’s secretary general, said the bloc was
watching events in the European union, hoping to learn from the
Greek debt experience, and avoid similar pitfalls.

“The lesson for us is not that we should slow down our
movement towards the monetary union, but really to ensure that
we do not find any of our member states, falling into the kind
of experience that Greece has gone into,” Mwapachu told Reuters.

The Greek debt crisis has sparked huge instability in the
11-year-old euro currency and led to demands for EU states to
work much harder on coordinating their economic policies to
bring their finances into check.

“I think the EAC region has got to be concerned that the
euro area is going through this kind of turbulence. But then it
really goes down to point out how critical it is that you do
have effective macroeconomic convergence,” Mwapachu said.

EAC has a gross domestic product of $73.3 billion and a
population of close to 127 million.

Speaking earlier at a news conference during the launch of a
World Bank report on doing business in the EAC, Mwapachu said
the common market would start on schedule, but said some laws,
like those on labour and movement of capital, had to be reformed
to smooth the process.

“We are going to begin the process from July 1. It will
demand quite a bit of reforms at national levels and maybe even
at the EAC level,” he said.

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East Africa’s monetary goal undaunted by euro woes