Njuguna Ndung'u: Consolidating economic integration in Africa
Remarks by Prof Njuguna Ndung'u, Governor of the Central Bank of Kenya, at the
9th Meeting of the Association of African Central Banks (AACB) Eastern Africa Sub-region,
Nairobi, 14 July 2010.
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Hon. Uhuru Kenyatta, Deputy Prime Minister and Minister for Finance of the Republic
of Kenya;
Fellow Central Bank Governors of the Eastern Africa Sub-region;
The Executive Secretary General of the AACB;
Chief Executives of Regulatory Authorities in Kenya;
Distinguished Guests;
Ladies and Gentlemen:
allow me to thank you most
Hon. Deputy Prime Minister and Minister for Finance,
sincerely for finding time from your busy schedule to grace this important meeting in the
calendar of Central Banks in the Eastern Africa Region. Your presence here today
demonstrates the serious commitment of the Government of Kenya to monetary and financial
integration in the Continent as we strive to become a regional financial hub in line with
Kenya's Vision 2030. For instance, just this month, we witnessed the launching of the
implementation of the East African Common Market.
May I also extend a hand of welcome to my fellow Governors from the Eastern Africa
subregion present here today. I heartily thank you for finding time to be in Nairobi. This is indeed
a very great honour to the Central Bank of Kenya and our country. I also warmly welcome
the Executive Secretary of the AACB whose presence and contributions in the deliberations
we look forward to.
We also appreciate the presence of the Chief Executives of other Financial Sector
Regulatory Authorities in Kenya, whose presence here today signifies the all important
synergy required between the different regulators in the process of financial integration.
Hon. Minister, the Abuja Treaty envisaged the integration of the African Continent through,
among others, the strengthening of the sub-regional groupings and harmonization of national
policies for the eventual evolvement of a monetary union in the continent.
In line with this, the Assembly of Governors in the Continent have been implementing the
African Monetary Cooperation Programme (AMCP) since they adopted it on September 4,
2002 in Algiers. The objective of this program is to put in place a common single currency
and a common single central bank at continental level by 2021, at the end of a successful
convergence process, in accordance with the African leaders' vision of consolidating
economic integration in Africa.
Commendable progress in the implementation of the AMCP by the Eastern Africa sub-region
has been made. Most of our active members have been meeting a number of the
macroeconomic convergence targets, as we continue harmonization and co-ordination of
macroeconomic and monetary policies. We recently embarked on Stage III (year 2009-2012)
of the programme, whose successful implementation and assessment of macroeconomic
performance will form a basis for the establishment of a Continent wide common Central
Bank.
In addition Hon. Minister, the assembly of Governors are working on a common strategy
with regard to the establishment of the African Central Bank (ACB) as well as advising on the
formation of both the African Investment Bank (AIB) and the African Monetary Fund (AMF).
The realization of these institutions will bring us closer to a Continent wide monetary union.
benefits of integration have been evident across the
Hon. Minister and Fellow Governors,
globe, including securing access to larger markets, enhancing trade flows and in the process
attracting the much needed foreign direct investments, lowering trade costs among
neighbours, leveraging or locking in domestic reforms, increasing bargaining power and
political cohesion among others. Notwithstanding these benefits, regional groupings in Africa
have tended to give less emphasis to monetary integration. Under the AMCP, the Eastern
Africa sub-region Central Banks evaluate each other annually to ensure convergence in
policies as we pursue further monetary integration.
This meeting, Hon. Minister, will therefore consider the progress on the implementation of
the African Monetary Co-operation Programme (AMCP) by the Eastern Africa sub-region
countries in 2009; consider macroeconomic performance against the AMCP targets and the
status of execution of the decisions of the 8th meeting of Governors of the sub-region held in
Moroni, Comoros.
My fellow Central Bank Governors, Ladies and Gentlemen, with these few remarks it is
now my humble duty to invite the Hon. Deputy Prime Minister and Minister for Finance to
address and officially open this meeting.
Welcome Hon. Minister.