EAC News

 

The East African Community (EAC) region registered a 4.2 percent recovery last year, thanks to easing of Covid-19 restrictions.

The turn round is also attributed to strong performance of the agriculture, services, construction and manufacturing sectors. 

 

The modest economic recovery registered in 2021 may have as well been boosted by increased public investments.

This was revealed in Arusha on Friday during a meeting of the EAC Monetary Affairs Committee held virtually.

The meeting which consisted of central bank governors from the six partner states was optimistic of further growth.

"Growth in the region is expected to improve through resumption of global economic activity with the easing of containment measures", they said. 

Tourism, the lifeline of economies of some EAC states, was severely impacted by Covid-19, almost bringing it to its knees. 

The region lost a record $ 4.8billion in revenues in 2020 alone as the foregin visitors dropped to 2.25 million from 6.9 million in 2019.

However, the central bank governors insisted that measures put in place to pave way for recovery would pay off.

Besides Covid-19, the region had to grapple with rising global inflation, tightening financial conditions and worsening debt vulnerabilities. 

Global tensions such as thecurrent Russia-Ukraine war is likely to fuel economic woes of the region due to the oil price hike.

The worrying developments,says the EAC secretariat, have been managed through what it described as an  "accommodative policy stance".

These are regulatory changes such as relaxation of rules on loan classification/restructuring and  extended lending facilities.

Others are liquidity assistance and reduced charges on mobile transactions "to support financial intermediation and digitalization".

However, the central bank governors expressed their worries about the East African Monetary Union (EAMU) roadmap.

They asserted continued delay would derail implementation of one of the pillars of regional integration. 

They cited the desired financial convergence efforts currently underway which would be impacted by uncertainty over Eamu.

The EAC Monetary Affairs meeting was convened to review the status of implementation of agreed actions on the monetary union protocol.

Also on agenda was the progress in attaining the criteria for the financial systems convergence in the region said to lag behind.

"There have been delays in realizing targets set out in the Eamu roadmap", the central bank chiefs from the six partner states stated.

The meeting urged the EAC secretariat in Arusha to fast-track pending activities of the Eamu roadmap in collaboration with other stakeholders.

The stalled process is reported to have triggered "slight delays" in effecting the proposed cross-border payment systems in EA.

They agreed on continuing interoperability initiatives at national level that would enhance the East African Payment System (EAPS).

This has to go along with engaging other stakeholders at the African continental level on further integration of cross-border payment.

Tanzania was represented at the meeting by the deputy governor of the Bank of Tanzania (BoT) Yamungu Kayandabila.

The meeting, which was chaired by Kenya Central Bank Dr. Patrick Njoroge,  also took note of the increasing financial innovations.