The Arusha Conference Calls for Further Integration and Reforms in EAC on the Road to a Monetary Union
IMF News, November 1, 2016
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- Published: November 1, 2016
Event overview and participation
- Press Release No. 16/478
- Date: November 1, 2016
- Organized by: East African Community (EAC) Secretariat, the European Union (EU), and the International Monetary Fund (IMF)
- Venue: Arusha, Tanzania; conference title: “Regional Integration in the EAC: Making the Most of the Common Market on the Road to a Monetary Union”
- Dates: October 31–November 1, 2016
- Participants included:
- Finance Ministers and Ministers in charge of regional cooperation
- Central Bank Governors
- Other senior policymakers, regional capital markets regulators
- Academics, civil society, and private sector leaders from across EAC member countries
- Senior representatives from international financial institutions and other monetary unions
- Press contact: PRESS OFFICER: Andrew Kanyegirire; Phone: +1 202 623-7100; Email: MEDIA@IMF.org
Progress in regional integration (Customs Union and Common Market)
- Participants assessed progress since inception of:
- Customs Union in 2005
- Common Market in 2010
- Noted achievements:
- Considerable progress towards a single entry visa
- Improvements in processing times at ports
- Removal of internal tariffs
- Areas identified by private sector representatives as needing further progress:
- Non-tariff barriers
- Rules of origin
- Tax administration and harmonization
- Automation of trade processes
- Labor mobility to facilitate trade of goods and services further
- Observations and recommendations:
- Sequential harmonization could be pursued in implementing the single customs territory and tax harmonization, given experiences in other regions
- Accountability and ownership are critical to a successful integration process
- Reference: second EAC Common Market Scorecard 2016 evaluates Partner States’ compliance to the free movement of capital, services, and goods
Financial sector integration and Fintech
- Considerable progress made in:
- Integration of payment systems
- Integration of financial markets
- Challenges noted:
- Still high compliance cost due to different regulations in member countries
- Fintech:
- The EAC region is ahead of many other countries in the world on the Fintech front
- Policy emphasis:
- Importance of proper sequencing and pace of financial integration because of associated risks
The road toward a monetary union — macroeconomic convergence and institutional needs
- Theme: “The Road toward a Monetary Union”
- Key macroeconomic points:
- Fiscal deficits need to be brought down to meet the convergence criterion and to ensure the stability of the future monetary union
- Convergence goes beyond headline fiscal deficits and public debt; fiscal risks need to be monitored closely
- Additional requirements for a successful transition:
- Further progress needed in data harmonization
- Further progress needed in monetary policy frameworks and operations
- Need to establish the new institutions that will play a key role for the implementation and resilience of the union
Statistics and capacity development
- A forum on “Improvements in East African Statistics Through Capacity Development” followed the conference
- Highlighted recent improvements in economic and financial statistics in EAC countries through capacity development initiatives supported by:
- The EAC Secretariat
- The IMF
Reference materials and access
- The program, speeches and presentations to the conference are available at:
- http://www.imf.org/en/News/Events/Regional-Integration-in-the-EAC
IMF Press Release No. 16/478 — November 1, 2016