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East African Community
Protocol of the establishment of the East African Community Monetary Union
- Not commenced
- [This is the version of this document at 30 November 2013.]
Part A – Interpretation
Article 1 – Interpretation
In this Protocol, except where the context otherwise requires:"Community" means the East African Community established by Article 2 of the Treaty;"Council" means the Council of Ministers of the Community established by Article 9 of the Treaty;"East African Central Bank" means the East African Central Bank established in accordance with Article 20;"East African currency unit" means the unit of currency that the currencies of the Partner States shall be converted into before adoption of a single currency;"financial key" means the cost and benefit sharing formula or figure indicating the financial contribution of each Partner State in the single currency area in relation to the East African Central Bank;"financial market infrastructure" means a multilateral system among participating institutions, including the operator of the system, used for the purposes of clearing, settling, or recording payments, securities, derivatives, or other financial transactions;"financial system" means interconnected financial institutions, markets, instruments, services, practices and transactions in the Community;"free floating" means an exchange rate regime that is determined by market forces of demand and supply;"harmful tax competition" means tax measures introduced within the Community as a result of preferential tax regimes that offer tax advantages to particular entities in one Partner State to the detriment of other Partner States;"monetary union" means the East African Community Monetary Union established by Article 2;"national central bank" means the central bank of a Partner State;"payment system" means a set of instruments, procedures, and rules for the transfer of funds between or among participants, including the participants and the entity operating the arrangement;"public entity" means an entity established by Community law or any national law of a Partner State, and includes a local authority or any other body or entity where the Government of a Partner State has a controlling interest;"Secretary General" means the Secretary General of the Community appointed under Article 67 of the Treaty;"single currency area" means the geographical area of the Partner States which adopt the single currency;"System of central banks" means a network of central banks composed of the East African Central Bank and the national central banks of the Partner States in the single currency area where the East African Central Bank formulates the policies which are implemented by the national central banks;"Summit" means the Summit of the Heads of State established by Article 9 of the Treaty;"Treaty" means the Treaty for the Establishment of the East African Community.Part B – Establishment, objectives and scope of the Monetary Union
Article 2 – Establishment of the East African Community Monetary Union
Article 3 – Objective of the Monetary Union
The objective of the Monetary Union shall be to promote and maintain monetary and financial stability aimed at facilitating economic integration to attain sustainable growth and development of the Community.Article 4 – Scope of co-operation in the Monetary Union
Part C – Pre-requisites for the Monetary Union
Article 5 – Pre-Requisites for the Monetary Union
Part D – Convergence
Article 6 – Macroeconomic convergence criteria
Part E – Macroeconomic policy framework
Article 7 – Macroeconomic policy framework
In order to achieve macroeconomic stability, economic growth and balanced development, the Partner States agree to adhere to the macroeconomic policy framework comprising the fiscal policies, the monetary policy and the exchange rate policy provided for in this Part.Article 8 – Fiscal policies
Article 9 – Public debt management
Article 10 – Building resilience and managing economic shocks
Article 11 – Monetary policy
Article 12 – Exchange rate policy
Article 13 – Foreign exchange transactions by Partner States
For the purposes of Articles 11 and 12, foreign exchange transactions by the Governments of the Partner States in the single currency area shall be carried out through the system of central banks referred to in Article 20 (2).Part F – Financial, payment and settlement systems
Article 14 – Financial system
Article 15 – Payment and settlement systems
Article 16 – Financial management, accounting and reporting
Part G – Statistics
Article 17 – Statistics
Part H – Single currency
Article 18 – Name, status and adoption of single currency
Article 19 – Determination of conversion rates
The Council shall before the single currency becomes the legal tender of the single currency area, fix irrevocable conversion rates at which the single currency shall replace the currencies of the Partner States.Part I – Institutional mechanisms
Article 20 – The East African Central Bank
Article 21 – Other institutions to support the Monetary Union
The Summit shall, on the recommendation of the Council, establish the following institutions to support the Monetary Union:Part J – General provisions
Article 22 – Harmonisation of policies, laws and systems
Article 23 – Transitional provision
The Summit shall, on the recommendation of the Council, establish an institution to be known as the East African Monetary Institute, which shall be responsible for the preparatory work for the Monetary Union.Article 24 – Measures to address imbalances
The Council shall develop measures to support a Partner State that experiences macroeconomic or structural imbalances arising from the implementation of this Protocol.Article 25 – International and regional agreements on matters relating to Monetary Union
For the purposes of Article 130(3) of the Treaty, the Partner States shall involve the East African Central Bank in the negotiation, conclusion and implementation of any agreement with a foreign entity that may impact on the single monetary policy and single exchange rate policy.Article 26 – Admission to single currency area
The Summit, may on the recommendation of the Council, admit a Partner State which fulfils the requirements of Articles 5 and 6, into the single currency area.Article 27 – Regulations, directives and decisions
The Council shall make regulations, issue directives, or take decisions necessary for the effective implementation of this Protocol.Article 28 – Dispute settlement
Any dispute between Partner States arising from the interpretation or application of this Protocol shall be settled in accordance with the provisions of the Treaty.Article 29 – Amendment of the Protocol
Article 30 – Entry into force
This Protocol shall enter into force upon ratification and deposit of instruments of ratification with the Secretary General by all the Partner States.Article 31 – Depository and registration
History of this document
30 November 2013 this version
Consolidation