RE: “Now is the time to phase out the dollar in regional trade, not tomorrow” (The New Times, September 9).
It’s good that Mr Oscar Kimanuka presented the idea, but he unfortunately doesn’t offer the economist view of how feasible it is to have six different currencies operating in the region across borders.
If this happened tomorrow, it would cause economic confusion. What is possible is a single currency for the EAC, but even this cannot just be rushed into play considering that all the six countries in the EAC are at divergent inflationary levels.
Even in Europe where countries seemed to have their economies a bit at par, they now see the euro plummeting and have no formula to save it.
A lot has to be considered and achieved before a single currency can even be talked about again. If it is hurriedly ushered in just for the sake of beating a deadline, it will fail.
For this to be effective, EAC countries need to implement a single currency, use the same policies, etc.
Otherwise, exchange rates fluctuations will always provide a room for an intermediary currency which is in this case the dollar.
David Rugamba Muhizi