Off the wire
• Over 100 Chinese tourists visit Kenya  • LME base metals rise on Tuesday  • Spanish economy to grow by 2.4 pct in 2015: PM  • Roundup: Cyprus to sign controversial military agreement with Russia  • Ireland says IAG commitments not enough to accept bid for Aer Lingus  • Rwanda, Israel strengthen ties in ICT sector  • Kerry calls for patience over nuke talks with Iran  • Man with swine flu dies in hospital in Slovakia  • Roundup: British PM says no lethal weapons to arm Ukraine "at this stage," stresses diplomatic solution  • 1st LD Writethru: Cyprus to sign controversial military agreement with Russia  
You are here: 　 Home

Africa's trading bloc eyes single currency by end of 2018

Xinhua, February 25, 2015 Adjust font size:

Africa's largest trading bloc, the Common Market for Eastern and Southern African (COMESA) on Tuesday said that it has set a target of having a single currency for the 19 member states by the end of 2018.

COMESA Monetary Institute Director Ibrahim Zeidy told Xinhua in Nairobi that member states are currently fast tracking the macro economic convergence in readiness for the single currency.

"The single currency will reduce the cost of transaction among the member states," Zeidy said on the sidelines of the Afrik4r- Comesa 1st peer review meeting.

The three day event brought over 200 delegates from the trading bloc to review ways of accelerating regional policy implementation through the use of monitoring and evaluation tools.

Zeidy said that member states will have to harmonize fiscal and monetary policies for a successful monetary union.

"Member states will also have to agree to maintain the same level of inflation as well as foreign exchanges reserves and fiscal deficit as a percentage of Gross Domestic Product (GDP)," Zeidy said.

Under the monetary union, the 19 member-states are expected to come up with a single currency, eliminating the current exchange headache. This may however prove to be a long shot.

The 19 countries have overlapping memberships. This is expected to put fiscal and macroeconomic convergence to the test as the two blocs pursue different priorities, being as they are at different stages of integration.

Zeidy noted that the biggest challenge to implementation of a single currency is that each member country is at a different stage of development.

The director said in order to fast track the operationalization of the single currency, the bloc commissioned a study dubbed Facilitating Multilateral Fiscal Surveillance.

The African Development Bank is also assisting COMESA to have a single monetary union.

Zeidy said the trading bloc is also seeking to liberalize conditions for trade in services so as to expand the trade in services in the region.

The Ministry of East African Community Affairs, Tourism and Commerce Integration Secretary Barrack Ndegwa said Africa's regional integration will accelerate economic development.

"This is because it will create large markets out of Africa's small fragmented economies," Ndegwa said.

COMESA launched its Customs Union in 2009, but slow implementation of common external tariff structures has seen member states get into numerous trade disputes with firms in the region.

But despite slow integration, the push to integrate COMESA members' macro-economic policies is buoyed by the high number of specialized institutions that it has set up such as Preferential Trade Area (PTA) Bank and PTA Reinsurance which are based in Nairobi. Endi