While browsing the web during a recent visit with an elderly relative, we came upon a picture of a 1937 issue of the East Africa Shilling coin.
We remarked on its mint condition and how, jumping at you from the screen, almost tactile the image appeared. It was among the succession of currencies in circulation during the colonial times right up to independence, specifically in the then three East African countries of Uganda, Kenya and Tanzania.
My relative was overcome with nostalgia, the coin having once symbolised his “affluence” in his day traversing the borders as a young, journeyman artisan.
Predictably, he set upon reminiscing about the shilling’s worth in its heyday and the “much you could do with it.”
Then he wondered about “the new one they have been reporting in the news.”
He was referring to the East African Monetary Unit (EAMU), due to be launched in 2024.
With slightly more than 5 years remaining in the envisaged 10-year process since the EAC Heads of States inked the Monetary Union Protocol in 2013, my relative is among the many eagerly awaiting it.
For many of us, however, the wait is perhaps less in nostalgia than in the expected benefits.
The single currency aims to establish monetary stability within the Community, in addition to enhancing the ongoing economic integration efforts and the attainment of sustainable economic development of the Community.
However, it may seem that unless the process is hastened, there are those of us wondering whether the EAMU will launch according to schedule.
The EAC Monetary Institute Bill, which seeks to establish the currency’s core governance and policy institution, leading to a regional central bank, is already behind schedule. It was expected to have been in place by 2015.
Passed in April by the East African Legislative Assembly, the Bill awaits assent by the six EAC member states.
Three more Bills to establish other necessary institutions are still in the early stages of development. The institutions are the East African Statistical Bureau; East African Surveillance, Compliance and Enforcement Commission; and East African Financial Services Commission.
My relative may be nostalgic when he remembers the East Africa Shilling, but it is also symbolic of how close and socio-economically interlinked East Africans have always been.
Indeed, comparing with the other Regional Economic Communities on the continent, as I have previously observed in another platform, it is a bit puzzling that it should be the financial aspect in the progression towards full integration that the EAC appears most behind.
The Africa Regional Integration Index Report (ARII) inaugurated in 2016 classifies integration indicators in five broad categories, namely: Trade integration; Regional infrastructure; Productive integration; Free movement of people; and, Financial and macroeconomic integration.
According to the ARII, the EAC is the most integrated region on the continent standing out in all the indicators, except in financial and macroeconomic integration which remain in progress.
This is perhaps not surprising, as the Southern Africa Common Monetary Area was established more than three decades ago in 1986 with Namibia, Swaziland, and Lesotho linking their currencies to the South African Rand. Likewise, the CFA franc shared among eight West African countries under the West African Economic and Monetary Union formed more than two decades ago in 1994.
Adding to the seeming EAC fiscal lag, are the convergence aspersions that have been cast by analysts’ dissatisfaction with other indicators that the EAC member states are still working to comply with, specifically the key economic targets on public debt, inflation, forex reserves and budget deficit.
A United Nations Economic Commission for Africa (UNECA) study last October raised the red flag on these challenges, which threaten to be a stumbling block on the single currency regime.
It is also still memorable how in February last year Christine Lagarde, the International Monetary Fund managing director, urged the EAC to focus on consolidating integration gains achieved in infrastructure, the Common Market and the Customs Union integration while going slow on the monetary union.
She pointed out the apparent fissures in the bloc over the Economic Partnership Agreement with the European Union, in addition to low intra-regional trade and non-tariff barriers issues that still dog the region. She was concerned that these alluded to signs that the building blocks may not firmly be in place for an EAMU.
It, nevertheless, is clear the EAC member states are resolute in their determination towards integration.
With this, while there may be some challenges, it is also encouraging that other building blocks such as realignments of the central banks, capital markets and stock exchanges remain firmly on course.
As for my relative and I, we revel at being East Africans and remain hopeful that the EAC shilling, or whatever it shall be called, will arrive on time.
The views expressed in thisarticle are of the author.