njuguna ndung ’ u : working towards an east african monetary union remarks by prof njuguna ndung ’ u, governor of the central bank of kenya, at the opening of the meetings of the economic affairs sub - committee of the monetary affairs committee mac, nairobi, 3 april 2012. * * * mf and igc officials present ; distinguished delegates from eac partner states central banks and eac secretariat ; ladies and gentlemen : the central bank of kenya is delighted and honoured to host you in this workshop aimed at reviewing the various studies under mac priority activities that will assist in understanding the policy terrain and the process of eamu protocol negotiation. the eac has a target of moving towards a monetary union and this meeting will improve and further consolidate our understanding of the eamu process and invigorate and guide our integration agenda. on behalf of the central bank of kenya, let me take this early opportunity to thank all those who have contributed to the organization of this workshop and all the participants and resource persons. i wish you an enjoyable stay in nairobi. ladies and gentlemen ; the monetary affairs committee ( mac ) of the eac central bank governors is working on various fronts to provide a knowledge base for exchange rate and monetary policy frameworks and how the policy designs can be applied in eac. this will support the east african monetary union ( eamu ) protocol negotiation, currently underway. in order to fast track this process, governors met in june 2010 and identified and apportioned the various priority study areas that would ensure that the decisions taken on eamu are informed and policy proposals are consistent with the aspirations of eac. the central banks of eac identified three levels of this process : analytical and design work, which entails immediate activities to improve the understanding of the entire eamu process, especially the pre - conditions for eamu establishment and the institutional set up ; harmonization of operating frameworks, which entails undertaking all the activities that will result in the harmonization of eac partner states ’ operating frameworks, thereby setting the stage for enhanced convergence in not only policies, but also the required structures ; and, the above blocks will deliver the input to the policy regimes block, which entail the tools for negotiating the eamu protocol. this block is being dealt with by the high level task force ( hltf ). distinguished delegates : the output from the first two blocks is meant to provide the technical input required to inform the hltf, a body

been able to implement far reaching reforms in many areas including public financial management, revenue administration, financial sector regulation as well as macroeconomic policy analysis. i am sure you will agree with me that these reforms have contributed substantially in the growth and development of our economies that we have witnessed in the region in recent years. in kenya for example, east afritac has been our main source of technical assistance in implementing the public financial management aspects that were required to be implemented in a time bound manner by our constitution 2010. in this regard, we have received valuable and timely support in enacting the public finance management act 2012 and the accompanying regulations, reengineering ifmis, setting up the national treasury, performance based budgeting, revenue administration, and financial reporting and in developing the vat bill that is now in parliament. bis central bankers ’ speeches these are just a few examples of the critical support that we have received from east afritac. but one common feature of the support in these areas is that the technical assistance has been relevant and demand driven primarily to meet the requirements of our kenya constitution 2010. i must add that kenyans, through the national assembly have also been very proactive in demanding many of these reforms especially in performance based budgeting and financial reporting and accounting. there is therefore strong ownership of these reforms and this is a clear indication that they will be sustained. i believe what i am saying for kenya should be true for all the seven recipient countries of east afritac ’ s technical assistance and capacity building initiatives. in this regard, and on behalf of all the seven recipient countries, i would like to take this opportunity to once again thank the imf and the other contributing partners without whose support these reforms would not have been possible. but let me add that while we have made substantial progress, we need to do a lot more to in order to advance our reform agenda and in this regard, i welcome this meeting because it will help us in assessing implementation of our work plan for the financial year 2013 and also consider the proposed work plan for the financial year 2014. let me also say that the mid - term evaluation of east afritac ’ s performance will play a useful role in establishing the exact extent to which we have achieved the objectives we have set together. it will also inform any necessary realignment to sharpen our focus to the most relevant and priority areas. the evaluation report to be presented on wednesday should therefore be of keen interest to the steering committee. ladies and