Uganda rejects proposal to set up East African Central Bank in Arusha

Uganda has overruled an authentication report by a Committee of the East African Community, an EAC Council of Ministers that is proposing to establish the East African Central Bank headquarters in Arusha, Tanzania.

Rebecca Kadaga, Uganda’s First Deputy Prime Minister who also doubles as the Minister of East African Community Affairs made this revelation during a press briefing at the Ministry in Kampala recently.

The EAC Council of Ministers at its 40th meeting in Arusha on February 26, 2021, designated July 1, 2021 as the date for the establishment of the East African Monetary Institute (EAMI), a forerunner to the East African Central Bank.

During the first quarter of 2022, following the lifting of COVID-19 restrictions in Uganda, the Secretariat dispatched a verification team to complete the task by commissioning a feasibility study in all the seven partner East African states: Kenya, Burundi, Rwanda, Uganda, South Sudan, Tanzania and the Democratic Republic of Congo (DRC).

Following the EAC procedures, the regional ministers had also engaged the Secretariat to initiate the process of identifying the Institute’s host partner state.  However, following the COVID-19 pandemic lockdown, the process was delayed until 2022.

Uganda’s EAC Minister, Rebecca Kadaga informed journalists that the evaluation report by the verification team of experts interacted with stakeholders in Uganda and their final recommendation was to give Tanzania the priority to be the preferred host, this was done at the expense of Uganda which was sidelined to host to the regional Central Bank in Kampala.

Rebecca Kadaga The EAC Minister addressing journalists in Kampala about the East African Central Bank
Rebecca Kadaga The EAC Minister addressing journalists in Kampala about the East African Central Bank

The operationalisation of the Monetary Institute is expected to successfully give leeway to the EAC single currency by 2024 within two years, as predicted in the East African Monetary Union Protocol.

Minister Kadaga also revealed that the Government of Uganda has offered space at the former Greenland Bank to host the Institute while a prime plot of land in Naguru has been secured for the construction of the East African Central Bank headquarters.

Arusha, Tanzania is the current host to the EAC headquarters; East African Legislative Assembly – EALA and the East African Court of Justice.

By a resolution of the Council of Ministers, a partner state that will host the Monetary Institute is expected to provide office rent, office equipment, utilities and other support for the first two years.

The Institute will act as a transitional mechanism to the EA Central Bank that will issue the single currency expected to be in place by year 2024.

Regional Legislators under their Parliamentary Forum on the East African Community Affairs Committee – PEACA recently concluded two days of induction and orientation at Speke Resort Munyonyo in Kampala, Uganda to discuss deepening issues of expediting the East African Federation.

During the event, Amanya Mushega who previously served as the Secretary General of the EAC for five years from 2001 to 2006, acknowledged that currently, the EAC integration process has achieved key milestones.

The EAC collapsed in 1967 – four years – after it was created in 1963, the regional bloc was later revived several decades after in 2000.

The Chairperson of the EAC Affairs Committee, Dicksons Collins Kateshumbwa, observed that while the integration seems to be farfetched, key achievements have been made, but also noted that several challenges still exist relating to the common market and movement of labour.

He also clarified that in 2017, the EAC established a single customs territory to facilitate faster trade within the region, including the elimination of non-tariff barriers to reduce the cost of doing business. At the 22nd Ordinary Summit of the seven EAC heads of state held on July 22, 2022, in Arusha, the EAC Heads of State directed all partner states to ratify all outstanding agreements and protocols and deposit with the Secretary-General instruments of ratification by December 31, 2022.

Several Bills passed by EALA were assented to during the summit which is aimed at fast-tracking infrastructure development for the East African Federation.

These include; East African Community Customs Management Bill, 2018; the East African Community Appropriation Bill, 2020; the East African Community Supplementary Appropriation (No.2) Bill, 2020; and the Lake Victoria Basin Commission Bill, 2021, among others.

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