South Sudan's English Daily Newspaper
"We Dare where others fear"
By Denis Ejulu
Central bank chiefs of the East African Community (EAC) on Friday said that ongoing conflicts and impact of climate change in the region have dampened the economic outlook of member states, despite the strong economic performance in 2023.
The EAC economies in 2023, recorded GDP growth rates ranging from 2.8 percent to 8.1 percent, according to a communiqué issued during the 27th ordinary meeting of EAC Monetary Affairs Committee (MAC) in Juba, the capital of South Sudan.
It noted that this performance was supported by strong growth in key sectors and continued implementation of policies and reforms geared towards improving private and public investment in most countries.
“Nevertheless, the region still faces unfavorable global financial conditions, negative spill-overs from geopolitical conflicts and the impact of climate change that continue to weigh on the economic performance of East African countries. In addition, the region is confronted with high fuel and food import prices, costly market access and pressures on the exchange rate and foreign reserves,” it disclosed.
The meeting which commenced on April 27 till May 3, 2024, was attended by the Governors of the central banks of South Sudan, Kenya, Tanzania, Burundi and representatives of the central banks of Uganda and Rwanda.
The meeting was held against a backdrop of improving global economic outlook, continued higher central bank policy rates in some of the advanced economies due to sticky inflation, continued exchange rate pressures partly arising from a stronger U.S dollar, adverse impact of climate change and vulnerabilities arising from sustained geopolitical tensions.
MAC also noted that EAC economies are projected to continue improving, with economic growth expected to be higher than the global and Sub-Saharan Africa growth rates.
“This robust performance is expected to be driven by strong performance in most sectors, supported by sustained public investment, improved export performance as well as measures to support private sector investment,” it said.
It disclosed that inflation in the region increased in 2022 and 2023 but has since eased following the implementation of appropriate monetary policies and the easing of global commodity prices.
“The increase in inflation in 2022 and part of 2023 was driven by high global commodity prices (mainly food and energy prices), owing to global shocks, as well as adverse weather conditions that affected agriculture production in some countries,” it said.
The meeting also reviewed the status of implementation of previously agreed actions towards the establishment of the East Africa Monetary Union (EAMU), with a focus on the decisions of the 26th MAC meeting held in Bujumbura in March 2023.
It also reflected on the progress made towards the establishment of the East African Monetary Union supporting institutions, where central bank governors pledged to continue working with the relevant authorities to advance the regional integration agenda.
The meeting noted that partner states and central banks have made significant strides towards implementing price-based monetary policy frameworks, harmonizing regional macroeconomic and financial statistics to support policy formulation, and implementing EAC capital markets infrastructure, and harmonizing principles and rules for the regulation and supervision of the region’s financial system.
The central bank chiefs also committed to enhancing risk and crisis management frameworks to ensure the stability of the region’s financial systems, in addition to adopting climate-risk awareness and promoting the use of the regional cross-border payments system (EAPS).
“Notwithstanding the above progress, the committee reaffirmed its commitment to implementing the remaining activities set out in the revised East African Monetary Union roadmap within the set timelines, in order to achieve the monetary union by 2031,” it said.
It noted that the governors resolved to review the performance of the convergence criteria taking into account the revised timelines for the achievement of the EAMU.
The governors also welcomed the central bank of Somalia, as the newest member of the EAC Monetary Affairs Committee and pledged to provide all necessary support to the central bank of Somalia as the country integrates into the EAC.
