East African Community studying West African integration model – dumps EU model
East Africa’s Monetary Union protocol currently under negotiation not only targets a single currency but also uniform fiscal and monetary regime by end of this year.
The East African bloc borrowed heavily from European Union’s experience to draft its custom and common market protocols. Early this year, the East African Community team was back in Europe to study its model for monetary union.
The shift of attention to West Africa comes just weeks after the International Monetary Fund (IMF) warned early this year that the East African Community’s single currency would not result from the same macroeconomic landscape as Europe’s since the risks are different.
“Unlike the case with East Africa, the EU single currency plan provided members with access to very large internal and global pool of savings at low rates of interest that allowed some countries to sustain private sector imbalances for a long period of time,” it said.
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