The East Africa Community

There is currently an East African Community (EAC) regional Intergovernmental Organization(IGO) embracing Kenya, Uganda and Tanzania (East African, 2005). It was founded in January of 2001, and is headquartered in Arusha, Tanzania. The new EAC is a customs union and paved the way for economic and ultimately political union between the three countries. In March, 2004, they signed another treaty setting up a new customs union which came into effect on January 1, 2005 under which Kenya, which is the richest of the three countries, will pay duty on its goods which enter Tanzania and Uganda until 2010.

A common system of tariffs has been established to apply to goods coming into those countries from other countries outside the EAC (East African, 2005). Rwanda was due to join the EAC in November 2005, and Burundi has applied to join also. Plans are underway to introduce

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he next four years since the introduction date is far enough ahead for the implementation to occur in all member countries of the EAC at the same time. This will facilitate trade between the countries. The monetary union is already seen as a necessary precondition for forming a political federation of the three present members of the EAC, and this can easily be extended to cover the additional East African Countries (East African Nations, 2005). The current EAC has agreed to work on government policies for achieving and sustaining macroeconomic convergence targets in the region and monetary union (East African Nations, 2005). This can be expanded to include new members. They are working on interest rates, savings, instruments and institutions of monetary policy, and the need to ensure sustainable fiscal deficits. In 2004, the three current members kept inflation within the five percent ceiling convergence criteria and all experienced a higher gross domestic product growth for that year, despite increased oil prices and unfavorable weather in the region. Including more countries in the EAC will require much more work for the monetary sector, and much negotiating, but it is hoped that if other nations join at a slow rate,
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Approximate Word count = 2369
Approximate Pages = 9 (250 words per page)

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