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Sunday, November 29, 2020

Zambia proposes the establishment COMESA monetary body to lead to a single currency

Economy Zambia proposes the establishment COMESA monetary body to lead to a...

COMESA Secretary General Sindiso Ngwenya (r) and Defence Minister Kalombo Mwansa arrive for the COMESA Ministers' meeting in Lusaka
COMESA Secretary General Sindiso Ngwenya (r) and Defence Minister Kalombo Mwansa arrive for the COMESA Ministers' meeting in Lusaka

GOVERNMENT has proposed to establish a Common Market for Eastern and Southern Africa (COMESA) tripartite monetary institute to help achieve macro economic stability in the region.

The institute will undertake preparatory work that will lead to the creation of a monetary union with a single currency for the entire region.

Minister of Defence Kalombo Mwansa said there is need to convert the monetary institute, which became operational on March 7, 2011 in Nairobi Kenya, into a tripartite monetary institute based on the spirit of the tripartite arrangement of harmonising efforts between regional economic communities.

Dr Mwansa said this during a joint meeting of COMESA Ministers of Finance and COMESA committee of governors of central banks.

He said Government hopes the tripartite integration process will continue in all integration agendas of the three Regional Economic Communities (RECs).

He said this follows the signing of the declaration that launched the negotiations for the establishment of the COMESA, Southern African Development Community and East African Community tripartite on July 12, 2011 in South Africa,

He urged COMESA to establish measures to foster financial stability and avoid activities driven by speculation and putting in place policy to regulate capital flows.

And speaking earlier, COMESA secretary-general Sindiso Ngwenya said the proposed COMESA tripartite monetary institute is necessary for the three RECs to harmonise activities, in areas of competition, financial and payment systems, capital markets and commodity exchanges.

Mr Ngwenya said COMESA must consider endorsing the Multilateral Fiscal Surveillance Framework to constrain and co-ordinate member states ‘fiscal policies in the interests of the stability and sustainability of integration process.

He said attention the region is receiving from international capital and private investors confirms the improved economic performance by the countries.

This is evidenced by some countries such as Zambia receiving sovereign credit rating or others being in the process of being rated by international credit rating agencies.

Mr Ngwenya urged COMESA to stay the course and avoid the temptation of policy reversals when short-term cyclical economic downturns are faced.

And COMESA says preparation for the operationalisation of COMESA Customs Union which was launched in December 2008 is on track.

[Zambia Daily Mail]

14 COMMENTS

  1. kalombo Mwansa where have you been daft Doc? If you were well vested in current affairs you would have been aware that Kenya, Tanzania, Uganda, Rwanda, and Burundi have revived the East African Community. And they are already on their to introducing a single East African currency by 2015. They are currently haggling on the location of the East African Central Bank. The economic conditions in Comesa are so varied that it is laughable to even suggest a single currency. To start with Kenya, Uganda and Tanzania have double digit inflation of 14%. Kenya and Uganda have budget deficits of over 50%. So there is no way these countries can come to some convergence to necessitate a single currency. Look at what is happening to the Euro? Zambia is better off doing this with other southern African…

    • research b4 u comment.check rism regional intergration support mechanism u wil find answers there

  2. …countries. It will be very easy to have convergence. Besides Southern Africa now has 8 countries that are classfied as middle income. The upper middle countries are: South Africa, Botswana, Mauritius and Namibia. The lower middle income countries are Angola, Lestho, Swaziland, and Zambia. All these countries have single digit inflation and low budget deficits as a percentage of GDP. It is easy to combine like with like. The COMESA single currency will result in Euro kind of problems.

  3. @1 Likota-you’re very wrong on kenya,Uganda budget deficits-they are in single digits. With these kinds of economic integrations it always easy to spread contagion from one reckless country to other fiscally disciplined countries.You cannot easily get out of it since you can’t unilaterally devalue your currency.Also the big boys in the union will muscle their way in to dictate our country’s budget and other spending priorities to keep fiscal policies in harmony.

  4. @3 Enka Rasha, Uhuru Kenyatta the Kenyatta the Kenyan Finance Minister last month announced a $13.7bn budget. 50% of it is borrowed money. In Uganda Museveni squandered $750m on Arms purchases and he also squandered $300m to get elected. The new Finance Minister has to borrow money to stich a budget together. Enka Rasha rather than you stating unsourced lies, I would advise you to google the The Monitor in Uganda and the Daily Nation in Kenya. You will be able to learn the financial quagmire these countries are in. @Thomas Dela Rue please I do not speak your gibberish language. Sometimes it is better to shut up than comment on things you do not understand!

  5. I do not know how Zambia will come out of this Comesa/Sadc arrangement.Sadc is proposing to have a single currency by 2018.So far Sadc has embarked on a number of inegration preparations in various sectors starting with the Payments intergration, legislation and customs unions.
    The headoffice for Comesa is currently in Zambia hence it will be interesting to see how Zambia will integrate with both regions let alone adopt one(which) single currency.

  6. Single currency is a bad idea. Greece’s problems affected the Euro. They need to practically weigh the disadvantages of single currency . Look at China and India they are doing extremely well. They haven’t joined the single currency stuff. Zambia should take a step at a time and priotise their goals. They should not get mixed up in complicated financial systems when they are still struggling to empower 80% of their people. They should just concentrate on education, health facilities, manufacturing industries, tourism and farming so that all Zambians could at least afford a meal a day in a booming economy.

  7. For once i have read really good comments on a matter that has far reaching implications on our nation. the regional integration and harmonization of payment systems is envisaged for implementation by 2018 (including the single currency) and depending on the infrastructural, legal and monitoring frameworks upgrade and implemenetation prior to roll out will see us enjoying the union or feeling the pinch. the good part is that it can positively influence the distribution of income for locals, by creating new employment and business opportunities. The downside in simple terms cud be sayn hello to another crunch/meltdown!

  8. #5 Likota i still insist you’re very very wrong and btw the budget is $13.4bn not $13.7 or Kshs 1.55trillion with a deficit of Shs 236bn which is 7.4% of GDP.And fyi budget deficits are counted as percent of GDP not like you’ve done to calculate the deficit as a % of total budget figures.Its done this way coz a more productive economy can carry a bigger debt.I know what i’m talking about and am more informed about kenyan affairs since my mom is kenyan and my dad is zambian.Don’t call me a liar as i didn’t call you one,i just said you’re very mistaken.You can take that deficit argument to Uhuru Kenyatta and he’ll tell you i’m right.

  9. This should never happen. Its impossible to unite the monetary policies of different countries…just look at the Euro and whats happening to Greece and Ireland…Stay away…

  10. I used to be recommended this website by way of my cousin. I’m not sure whether or not this post is written via him as no one else understand such detailed about my problem. You’re incredible! Thank you!

Comments are closed.

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