njuguna ndung ’ u : a successful regional integration in the east african community – the role of central banks remarks by prof njuguna ndung ’ u, governor of the central bank of kenya, at the bank of the republic of burundi ’ s golden jubilee celebrations, bujumbura, burundi, 7 june 2014. * * * his excellency honourable pierre nkurunziza, president of the republic of burundi ; honourable tabu abdallah manirakiza, minister of finance, cooperation & development, republic of burundi ; mr. john ciza, governor, bank of the republic of burundi ; central bank governors and deputy governors present ; distinguished guests ; ladies and gentlemen : good morning. i take this opportunity to thank mr. john ciza, governor of bank of burundi for inviting me and my fellow governors of the eac central banks to the golden jubilee celebrations of the bank of the republic of burundi. indeed, i am honoured to join the bank of burundi and to speak during this auspicious celebration of the 50th anniversary of the bank of burundi. today, while you are reflecting on the achievements of the bank for the last 50 years, i am going to focus the way forward towards “ a successful regional integration in the east african community : the role of central banks ”. i am happy to note that central banks in the region have adopted a coordinated approach to monetary and financial policy formulation and implementation. given that the structures of our economies are similar, this coordination has continued to enhance the effectiveness of policy as well as the convergence required. your excellency, ladies and gentlemen, before going into the main theme of this topic, allow me to briefly highlight some of the key milestones the eac partner states have made in driving the integration agenda forward since commencement in july 2000. the eac partner states undertook to establish among themselves “ a customs union, a common market, a monetary union and ultimately a political federation ”. the customs union is already in place and implementation of the common market is ongoing. the signing of the protocol establishing the east african monetary union by the summit in november 2013 was a clear demonstration of the commitment of our eac leaders in advancing the integration process. your excellency, ladies and gentlemen, economic integration is a vital ingredient of the development and growth of the eac economies. elimination of border restrictions between partner states to allow movement of people and goods will accord eac economies larger markets ; enhanced policy credibility across all spheres of

future u. s. policy following the recent political developments. secondly, other measures are being implemented to improve the business environment, including investments in infrastructure such as the standard gauge railway, advancing the use of information technology in doing business, and ensuring security, among others. these initiatives are key to promoting competitiveness in the economy. in addition, the growing youthful and entrepreneurial population is a boon to the business environment. kenya is ranked the world ’ s third most reformed country in the world bank 2017 doing business report. the performance of the economy has remained strong, with growth expected at 6. 0 percent in 2016 from 5. 6 percent in 2015. on the contrary, growth in the major african economies has been weighed down in 2016 largely due to the slump in commodity prices. thirdly, the diversification of the kenyan economy in terms of export products and external markets is a major source of resilience against adverse external shocks. about 40 percent of kenya ’ s exports are to africa, while the economy is not reliant on commodities. the current account deficit has been narrowing, and is projected at 5. 5 percent of gdp in 2016 from 6. 8 percent in 2015 and 9. 8 percent in 2014. the improvement in the current account balance reflects improved earnings from exports of tea, coffee, and horticulture. diaspora remittances and receipts from tourism have also been resilient. the cbk foreign exchange reserves, which stand at 4. 8 months of import cover, together with the precautionary arrangements with the imf totalling usd1. 5 billion continue to provide buffers against short term shocks. fourthly, as you may be aware, the banking sector has continued to play a key role in the economy through mobilisation of savings and allocation of the resources to key sectors. the cbk is strengthening the banking sector to ensure greater transparency and stronger governance, and also to promote effective business models and innovation. the central bank continues to engage with financial service providers to introduce innovative solutions or products in the market in order to boost financial inclusion and lower the cost of financial services. the cbk is also closely monitoring the impact of the recent legislation to cap bank interest rates on the economy, while implementing additional measures to lower the cost of credit on a sustainable basis. let me now turn to some of the available investment opportunities, which in my view provide the diaspora with an opportunity to participate in the development of our economy. i am happy that these products leverage