1. The 25th ordinary meeting of the East African Community (EAC)
Monetary Affairs Committee (MAC) was held virtually on 4th March
2022. The meeting was chaired by Dr. Patrick Njoroge, Governor
of the Central Bank of Kenya, and current chairperson of MAC.
Present were:
Hon. Moses Makur Deng, Governor of the Bank of South
Sudan;
Hon. Audace Niyonzima, Deputy Governor of the Bank of
the Republic of Burundi;
Hon. Soraya M. Hakuziyaremye, Deputy Governor of the
National Bank of Rwanda;
Dr. Michael Atingi–Ego, Deputy Governor of the Bank of
Uganda; and
Dr. Yamungu Kayandabila, Deputy Governor of the Bank of
Tanzania.
2. The meeting was held against a backdrop of rising global
inflation, tightening financial conditions, and worsening debt
vulnerabilities for developing economies owing to the protracted
COVID–19 pandemic, and geopolitical tensions. To manage these
developments, most EAC Partner States Central Banks continued
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with accommodative policy stance complemented by regulatory
changes including relaxation of rules on loan
classification/restructuring, extended lending facilities,
exceptional liquidity assistance, and reduced charges on mobile
transactions to support financial intermediation and
digitalization. The Committee also took note of the increasing
financial innovations.
3. The Committee noted that economic growth in the EAC region
recovered in 2021 to an average of 4.2 percent, largely supported
by easing of COVID–19 related restrictions, public investments
and strong performance in the agriculture, services, construction
and manufacturing sectors. Growth in the region is expected to
improve supported by a resumption of global economic activity
with the easing of containment measures and sustained
implementation of growth–supporting measures. Downside risks
remain elevated due to a slower global growth, rising geopolitical
tensions and increasing commodity prices.
4. The meeting reviewed the status of implementation of previously
agreed actions towards the establishment of the East Africa
Monetary Union (EAMU), with a focus on the decisions of the 24th
Ordinary MAC meeting held virtually in October 2020. The
Committee reflected on the progress in attaining the convergence
criteria and highlighted the areas that are lagging behind.
5. The Committee noted that Partner States’ Central Banks have
made significant strides towards the creation of key institutions of
the of the East African Monetary Union (EAMU), particularly the
East African Monetary Institute (EAMI); harmonization of
monetary and exchange rate policies; harmonization of regulatory
frameworks; implementation of measures to strengthen regional
payments systems; enhancement of cybersecurity frameworks;
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3 capacity building in AML/CFT and Risk Management for Partner
States Central Banks; and promoting cross–border trading in
government securities.
6. Notwithstanding the above, the Committee noted that there have
been delays in realising targets set out in the EAMU roadmap and
that there are several challenges that could further impede the
timely implementation of EAMU protocol. Therefore, the
Committee pledged to work with the EAC Secretariat and other
stakeholders in the EAC integration process to fast–track pending
activities of the EAMU roadmap.
7. The Committee noted progress still to be made in cross–border
payment systems and agreed on continuing interoperability
initiatives at national level, enhancing the East African Payment
System (EAPS), while engaging other stakeholders at continental
level on further integration of cross–border payment systems.
8. The meeting agreed to have an event in memory of the late Prof.
Emmanuel Tumusiime–Mutebile, the former Governor of the
Bank of Uganda. Modalities of the event will be agreed by the
Partner States Central Banks.
4th March 2022.
