Kenya: Central Bank challenges EA Banks to Expand
The Central Bank governor has challenged banks in the East African region to expand, in order to fast track the implementation of the East African Community.
‘We are seeing an opportunity of more than 126 million people across the community. It is a bigger market to offer services, and much more, a pool of expertise. Let’s go for the opportunities,’ said Ndungu.
The development, which Njuguna believes will capitalize on the free movement of goods and services across the Community, will also fast track the implementation of the East African Monetary Union.
‘As financial institutions, we would like the banks to facilitate and support investment and trade in the East African region, as we go ahead with the integration process,’ said Prof Ndungu
According to the governor, by banks investing in expansion, they would have firm bases in the region to facilitate trade and investment across the community.
Currently, Kenya Commercial Bank, East African breweries and Equity are some of the Kenyan institutions that have opened branches across the region in their growth strategy.
‘We understand that that the regional governments are discussing the aspects of the Common Market Protocol. As they continue to come up with mechanisms that can sustain economic growth, let’s start with many opportunities currently available,’ said the Professor, adding that the process had experienced many challenges before it was launched.
The Professor said that the governments of most EAC member states had almost implemented common or uniform monetary policies, with a couple of exceptions, which they are phasing the controls out of.
In an ambitious plan, the EAC heads of states have committed to ensure that the Monetary Union running will be in place by 2012. Currently, the Central Bank governors from the region have already embarked on a project to come up with a single currency for the EAC countries.
In addition, a Monetary Affairs Committee, housed in Arusha at the EAC Secretariat, contracted the European Central Bank in 2009 to carry out the study on the establishment of a Monetary Union.
‘I know it won’t be easier to come up with all this things. We have to consider the economic systems in place,’ said Ndungu, adding that all Member State’s economic condition must be factored in the new monetary system to avoid what is currently happening in Europe to the Euro.
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