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Kenya, Uganda now want Monetary Union delayed

Discussion in 'Kenyan News and Politics' started by BAK, Jan 31, 2010.

  1. BAK

    BAK JF-Expert Member

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    Kenya, Uganda now want Monetary Union delayed

    Kenya, Uganda and Tanzania currencies. Initial efforts by the East African Community to reach a common position on rolling out a single currency for the region have run into hurdles.

    By CHARLES KAZOOBA
    THE EAST AFRICAN

    Posted Sunday, January 24 2010 at 12:20


    Initial efforts by the East African Community to reach a common position on rolling out a single currency for the region have run into hurdles as Kenya and Uganda argue that the legal requirements of a full transfer of monetary sovereignty to the regional level carry the danger of exposing their countries' financial sectors to external shocks.



    Kenyan financial experts argue that the EAC Secretariat's demand that the confidentiality clause in the banking sector be lifted to pave the way for sharing information on financial transactions among partner states, could make commercial banks vulnerable to their competitors - even though lifting the clause is a prerequisite to the negotiations for the Monetary Union that commence some time this year.


    At a regional meeting in Kampala last week to assess how the transition to the Monetary Union would be enforced - at which a team of experts from the European Central Bank released the findings of a study on the establishment of such a union in East Africa - Kenyan officials said they were reluctant to share their country's financial details with the other members, although their laws allow them to share these with the International Monetary Fund.


    "We can't do that now. We have to wait until our laws have been amended," said a senior Kenyan banking official, who declined to be named since the session was closed-door.

    Dr Louis Kasekende, Deputy Governor of the Bank of Uganda, told The EastAfrican they would employ the Japanese model of "let-them-initiate-we-perfect" to skip certain components of preparation for the single currency.


    "Actually it is possible, based on that model, that we could miss the 2012 deadline by two years. It is Rwanda and Burundi telling us to wait for them since they have just joined," Dr Kasekende said.


    The Community's partner states have also been cautioned to carefully study the implication of transferring all their monetary powers to the regional level, since after implementation of the Monetary Union, any problems would jeopardise the entire region.


    For instance, the individual partner states will then have no way of adjusting the exchange rate to restore competitiveness, nor of easing domestic monetary policy to help conditions in the labour market. They may suffer prolonged unemployment if their labour costs became too high and wages and salaries cannot fall.


    Supervision

    According to the preliminary findings of the International Monetary Fund, Rwandan and Ugandan banks are the weakest in the region, registering low profits last year that the IMF attributes to lack of supervision, insufficient manpower due to engaging in new operations like retail banking, and inadequate skills. The IMF warns that greater integration of banking sectors in East Africa will make the region vulnerable to crises if the regionally active banks are not supervised.


    At the consultative meeting, EAC Deputy Secretary General for Planning & Infrastructure Alloys Mutabingwa urged partner states to reconsider their stringent national financial laws, which he said would dilute the blueprint of the Monetary Union.


    The East African States are also supposed to maintain similar economic cycles - with similar income levels, interest rates, inflation rates and commonly agreed standards for sound fiscal policies.


    Apparently, even the people involved in the design of the Monetary Union are also sceptical that the third pillar of integration will be achieved in accordance with the timetable. For this reason, a section of technocrats in the region is drumming up support for political mobilisation before even the talks for one currency start.


    "We will need to keep our nerve in the face of the inevitable setbacks. Establishing a Monetary Union in East Africa will be a difficult and risky task. It will require an enormous amount of work to reform institutions, change legislation and revise macroeconomic policies. It is a long-term undertaking, whose benefits will be realised over many decades," said Prof Tumusiime Mutebile, Governor of the Bank of Uganda, during the regional consultative meeting.


    Previously, it was estimated that the EAC currency would be introduced into circulation in 2012 but the studies that are currently guiding the process propose 2015 - although the officials from the European Union, which is already operating a fully-fledged Monetary Union, predict it will take a little longer.

    According to the analysts from the European Central Bank, the consequences of the EA Monetary Union are expected to go far beyond the need to adapt to the new single currency.


    "The inescapable consequence of Monetary Union is that a substantial part of national discretion in economic policy will have to be given up," the researchers say in their study conducted last year.

    The EAC, together with the European Central Bank, last year conducted studies to address the prerequisites for the East African Monetary Union (EAMU), the establishment of the legal and institutional framework necessary for the implementation of EAMU, preparatory work for the move to EMAU and the operational regulatory framework for EAMU.


    Irreversible consequences

    In the final draft report, which will be submitted to the Council of Ministers in April, the financial experts from the European Bank say the economic bloc will face irreversible consequences once partner states surrender national discretion in monetary and exchange rate policy if their economies are not sufficiently convergent.


    "The Monetary Union project requires radical changes in economic policies backed by reforms to institutions and legal changes. From the standpoint of macroeconomic policy, the most critical requirement is the gradual convergence of all the East African economies during the transition to Monetary Union, especially in terms of synchronisation of economic cycles of member states," Prof Tumusiime Mutebile said.


    Economists also argue that economic policy would become very rigid within an EAMU as individual governments lose the option of devaluation and monetary policy is set by a supranational East African Central Bank. In the event of an asymmetric shock that puts the economy in recession, an individual government would be very limited in its policy response options in an EAMU
     
  2. M

    Mbalamwezi JF-Expert Member

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    Mbio za Federation...Ooh Tanzania inachelewesha, ooohh Tanzania wajinga, waoga, oohh tu fast track federation...jamani, hata EU mnayoiiga leo imesota kama miaka 50 kufikia hapo ilipo...twendeni taratibu...tuki evaluate hatua zetu...oooh hapana, asiyetaka tumuache...hayo sasa!
     
  3. BAK

    BAK JF-Expert Member

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    Nakubaliana nawe kabisa. Juzi juzi nilikuwa nasikiliza habari kawamba baadhi ya nchi za EU zimeanza kufikiria kujitoa kwenye common currency (EURO) kwa kudai kwamba imekuwa ni kikwazo katika kuinua uchumi wao. UK hadi kesho bado wana British pound yao na hawala hawana mpango kabisa na kujiunga kwenye hiyo common currency ya EU.
     
  4. Wacha1

    Wacha1 JF-Expert Member

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    Wako wapi wale waliokuwa wanasema wanacheleweshwa? Manyang'au wako karibu na mabwana zao Ulaya kuliko wengi wanavyofikiri, tabia huwa haijifichi.

    BTW kama wengi wanakumbuka BCCI ilipoporomoka walitaka kukomba pesa kwenye branch yao ya Tanzania na kupeleka Kenya pesa, hivi bado tuna imani na this so called EAC? Sijui kwa nini tunapoteza wakati na hawa losers.
     
  5. JuaKali

    JuaKali JF-Expert Member

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    Maswala ya ardhi kwao ni issue ndo ila unapusa interest zao ndo utawaona walivyo wanafiki!
     
  6. Ngongo

    Ngongo JF-Expert Member

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    Smatta naomba maoni yako au EAC ni ardhi na utalii tu Tanzania inataka mambo ya muhimu si kukimbilia rasilimali za Tanzania [Ardhi na utalii].Tunahitaji sarafu moja ya EAC haya ndio mambo ya msingi.
     
  7. Smatta

    Smatta JF-Expert Member

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    [FONT=Arial, Helvetica]Its common knowledge that The EAC's economies are not in perfect step; one monetary policy will not be suited for all countries.What with the difference in exchange rates differeence between the countries, and our different money policies.

    [/FONT][FONT=Arial, Helvetica] monetary union can only be a success if the whole area covered by the single currency has the same legal framework (taxation, labour laws etc) and a labour force which is highly mobile, of which is not possible due to the misplaced nationalistic sentiments[/FONT] of some countries.

    And monetary union is so effin expensive, considering making changes like [FONT=Arial, Helvetica]educating customers, changing labels, training staff, changing computer software and adjusting tills.this we cant do
    [/FONT]
     
  8. Semilong

    Semilong JF-Expert Member

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    which coutry r u talking about? tanzania, uganda, rwanda, burundi or both....

    the true colours of EAC are starting to emerg
     
  9. Smatta

    Smatta JF-Expert Member

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    Am talking about Tanzania.
     
  10. Wacha1

    Wacha1 JF-Expert Member

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    Kwa hiyo ujuzi wako umeishia hapo?

    An educated Kenyan can come with changing computer software and adjusting tills, are you serious? What type of highly mobile labour force are you talking about?

    khe khe khe Nyang'aus bwana! Kwishnei.
     
  11. Smatta

    Smatta JF-Expert Member

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    Mie sio mjuzi kwa maswala haya ya economics, I just said what I know of which all are valid points. Tujadili hoja, usije na ukali kunijibu kwa sababu mie mkenya, Its a fact that having a monetary union is impossible right now, due to the facts that have been put forth by the gentleman who penned that article.

    And when I said a 'highly mobile labour force', I dint mean Kenya, why do you guys always like quoting me out of context, re read that sh*t again and tell me what i meant. You Wacha 1 are against me personally and what I stand for, that clouds your thinking of whatever I write down, which you interpret to suit your thoughts. Its sad.
     
  12. Wacha1

    Wacha1 JF-Expert Member

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    What you said is crap. Finito no discussion, at least now you admit you aren’t ready and you want to try mission impossible. When will you be? Wouldn’t it be easier for you to unite with your uncle UK or USA who owns IMF and WB. If you share your financial details without mkwaruzo why want to share with us when you know for sure you do not want. You will continue to be used until the 20th generation, as for us we know very well you are being used, this has not been a new phenomenon but it existed well before the first EAC.

    I don’t hate you personally, believe me if I did you will be dead by now. As far as I know you cry so much to be in Tanzania and without Tanzania you’ll be nothing you better thank those who keep you (Kimada). You guys you want to run before you walk, we can talk the talk, walk the walk and we can agree to disagree but at the present time its all about our resources and its potential.

    Kenyans oh yeah I hate them, because they failed for a long time to pay pensions to our brothers and sisters who were working in the EAC and I remember very well so many people were deported from Kenya without their belongings when you deliberately killed the first cooperation. They thought they belong to their uncle UK and they can bulldoze us from every quarter, but as a nation we were resolute to go on with building our nation and down the line now they come with open arms – forget about it, we would rather unite with SADC members not the Nyang’aus.
     
  13. Smatta

    Smatta JF-Expert Member

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    hey Nigga never give me those crappy threats under the guise of your internet name, if you are a man worth his salt, PM me and lets see who can do who, and who is worth being called a man, I am not scared am a Nairobian for crying out loud, we eat pieces of sh*t like you for break fast. PM me tafadhali usijichafulie jina kwa vitisho ambavyo najua huwezi hata tekeleza. mimi huja TZ kuchuma, na naapa kwa mwenyezi Mungu hakuna chochote ambacho waweza kunifanya mie hata nikikwambia mahali na lala, you cant do me no harm you retard, am past that age where a gang of unorganized hooligans can make me break a sweat. PM me Nigga.
     
  14. Wacha1

    Wacha1 JF-Expert Member

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    Huyu ndio Mkenya anatoka Nairobi ati naye anajisifu anajua kiingereza. Khe khe khe khe khe ... ....
     
  15. Smatta

    Smatta JF-Expert Member

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    Si jambo la kujisifu kujua kiingereza young man, najisifia Kiswahili pia, na Kiarabu, na Ki Pare, na Kikuyu, na naongea zote fluently, I ought to be proud of myself I think. Ni Pm tu kaka, labda nikwambie naja lini unitoe uhai. You made me laugh boy.
     
  16. n

    nomasana JF-Expert Member

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    thats right. tell em smatta.
     
  17. Wacha1

    Wacha1 JF-Expert Member

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    You need to read what I wrote. Usitegemee waliokuweka kimada watakusaidia. Huwa si PM Nyang'aus.
     
  18. G

    Geza Ulole JF-Expert Member

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    Quote:​


    [​IMG]

    hey Nigga never give me those crappy threats under the guise of your internet name, if you are a man worth his salt, PM me and lets see who can do who, and who is worth being called a man, I am not scared am a Nairobian for crying out loud, we eat pieces of sh*t like you for break fast. PM me tafadhali usijichafulie jina kwa vitisho ambavyo najua huwezi hata tekeleza. mimi huja TZ kuchuma, na naapa kwa mwenyezi Mungu hakuna chochote ambacho waweza kunifanya mie hata nikikwambia mahali na lala, you cant do me no harm you retard, am past that age where a gang of unorganized hooligans can make me break a sweat. PM me Nigga.




    quote]
    i wish you were in Juba to say these words! you will be sent home in a coffin
     
  19. G

    Geza Ulole JF-Expert Member

    #19
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    Quote:
    [​IMG]

    hey Nigga never give me those crappy threats under the guise of your internet name, if you are a man worth his salt, PM me and lets see who can do who, and who is worth being called a man, I am not scared am a Nairobian for crying out loud, we eat pieces of sh*t like you for break fast. PM me tafadhali usijichafulie jina kwa vitisho ambavyo najua huwezi hata tekeleza. mimi huja TZ kuchuma, na naapa kwa mwenyezi Mungu hakuna chochote ambacho waweza kunifanya mie hata nikikwambia mahali na lala, you cant do me no harm you retard, am past that age where a gang of unorganized hooligans can make me break a sweat. PM me Nigga.



     
  20. G

    Geza Ulole JF-Expert Member

    #20
    Feb 3, 2010
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    Quote:​


    [​IMG]

    hey Nigga never give me those crappy threats under the guise of your internet name, if you are a man worth his salt, PM me and lets see who can do who, and who is worth being called a man, I am not scared am a Nairobian for crying out loud, we eat pieces of sh*t like you for break fast. PM me tafadhali usijichafulie jina kwa vitisho ambavyo najua huwezi hata tekeleza. mimi huja TZ kuchuma, na naapa kwa mwenyezi Mungu hakuna chochote ambacho waweza kunifanya mie hata nikikwambia mahali na lala, you cant do me no harm you retard, am past that age where a gang of unorganized hooligans can make me break a sweat. PM me Nigga.




    i wish you were in Juba or Migingo Island to vomit these words! you would have been sent home in a coffin!
     
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