emmanuel tumusiime - mutebile : the planned introduction of the east african monetary union remarks by mr emmanuel tumusiime - mutebile, governor of the bank of uganda, at the opening of the east african legislative assembly consultative workshop on the east african monetary union, kampala, 9 september 2013. * * * honourable ministers and honourable members of the east african legislative assembly ladies and gentlemen the issue that we have gathered here to discuss today – the planned introduction of the east african monetary union ( eamu ) – is one which will have profound effects on this region for decades to come. later this year i expect that the heads of state of each of the partner states of the east african community ( eac ) will sign the protocol for the introduction of the eamu. the protocol will pave the way for the transition to eamu over the course of the next 10 years and the complementary legal, institutional and economic reforms. the east african monetary union is a project with potentially large long term benefits for all of the economies in the eac but which also entails considerable risks. the long term success of eamu will be dependent upon major changes to public policy and in the way in which public policy is made in all partner states of the eac. a successful monetary union is only possible if each partner state is prepared to accept the pooling of its economic sovereignty. many economic decisions which are now made at the national level will have to be made at the regional level. this pooling of economic sovereignty extends beyond the loss of independent national monetary policy and exchange rates, which is of course inherent in a monetary union ; it also requires that each partner state accepts constraints on its fiscal policy and implements fully the provisions of the common market, including not just free trade in goods and services within the eac but also the free movement of capital and labour within the eac. if we do not build the requisite foundations for monetary union, the introduction of eamu may actually harm our economies. the problems which are currently being experienced by some of the peripheral members of the euro zone – greece, portugal and spain for example – which have lost competitiveness on international markets and can no longer use exchange rate depreciation to restore their competitiveness, should provide a salutary lesson to everyone involved in planning for the introduction of the eamu. without wishing to pre - empt any of the contributions from my colleagues in the eac secretariat, the ministry of finance, planning and economic

to today ’ s event, the new acacia mall is in a very strategic location, as illustrated by the number of banks that have established outlets at this mall. the “ sapphire banking lounge ” at this branch is designed to offer orient bank ’ s customers a first class banking experience. i also have no doubt that orient bank ’ s existing menu of products will appeal to the customers of this branch and that the bank will continue to focus on providing quality services for its customers. the bank of uganda, as uganda ’ s monetary and regulatory authority, remains committed to ensuring price stability and a sound financial system. we shall continue to conduct vigorous financial sector regulation and supervision to ensure that all banks are well capitalised and that they have robust risk management frameworks. bis central bankers ’ speeches with these remarks, i once again commend the shareholders, the board of directors and senior management of orient bank for extending their branch network to bring banking services nearer to the people. it is now my honour and pleasure to declare orient bank ’ s branch acacia mall kampala officially open. thank you for listening. emmanuel tumusiime mutebile ( prof. ) governor, bank of uganda bis central bankers ’ speeches