Governor Bank of Uganda, Emmanuel Tumusiime Mutebile has appealed to the East African Community (EAC) States to desist from reinstating “selfish economic policies” that will block the progress of the integration.
Referring particularly to Buy Uganda Build Uganda (BUBU) Policy, Governor Mutebile said such policies would interfere with the smooth trading policies of the EAC market.
“Without going into details, it is a mistake for particular states to pursue policies that interfere with smooth trading policies. Policies like BUBU must be resisted,” Mutebile said.
The BUBU policy which has been touted by President Yoweri and the Trade Ministry aims at increasing the consumption of local products through public procurement and encouraging the Private Sector to consume locally originating products thus increasing the participation of the locally established firms in domestic trade.
The governor sounded the warning during the 22nd ordinary meeting of the EAC Monetary Affairs Committee (MAC) at Serena Hotel.
The meeting which was attended by Governors, and their representatives from Kenya, Rwanda, Tanzania, Burundi, Uganda and South Sudan, was intended to review the progress towards the operationalization of the EAC Monetary Union.
It was also intended to review the Road Map of the EA Monetary Union and its set timelines and also review the implementation status of the decisions of the 21th MAC meeting held in Kampala on 24th August 2017.
While the region continues to stride towards economic integration, cases of countries pushing protectionist economic policies continue to pose a threat to this integration.
Recently, Tanzania rejected a consignment of sugar from Uganda and insisted on taxing it before entry, even though under under the regional protocol, such goods must be duty free.
Mutebile, Who is also the chairman of the Monetary Affairs Committee appealed to other heads of Central Banks in the partner states to do more to fast-track the treaties of the road map to be able to achieve targets for the operationalization of the monetary Union.
According to a report that was prepared by the technical team, there has been significant process towards operationalization of the EAMU protocol.
Central Banks from all states had made strides on harmonization of monetary policy framework, exchange rate policies, rules and practices governing bank supervision, financial accounting policies as well as payment systems. A number of national laws are also being harmonized.
“In April 2018, the East African Legislative Assembly enacted the bill establishing the E.A Monetary Institute (EAMI). The bill now awaits approval from heads of states in November this same year” Mutebile said.
However, the governors also noted that there have been delays in realising targets set out in the EAMU road map with several challenges that could impede the full implementation of EAMU protocol.
The governors further agreed that the only way EAC could withstand all the economic global shocks like the escalating trade tensions, tightening Financial conditions, strengthening of the US dollar and rising commodity prices will be if the States unite and work together as one big block.
“There is need to remain vigilant in identifying and building resilience to shocks arising from the recent global developments. There is also need to enhance coordination of fiscal and monetary policies to boost capacity and preparedness to withstand economic shocks” said Florens Luoga, the Governor Central Bank of Tanzania