The International Monetary Fund (IMF) Managing Director, Ms. Christine Lagarde advised the East African countries in pursuit of integration to go slow on the project. The countries within East Africa, Kenya, Uganda, Tanzania, Rwanda and Burundi have been integrating over the years with projection to have a political federation in about 20 years. The caution from the IMF chief is coming from the lessons that Europe has had to have especially after the United Kingdom held a referendum and the people chose to exit the European Union.
“Coming from the European Union and a country that is part of the Euro area, I would certainly stress that, hasting slowly is probably the best way to go and consolidate one step at a time and make sure that the steps you have taken are actually solid, sustainable and will take you the next level. Don’t rush to integration. Infrastructure integration, market integration, custom integration.
Those are the steps that have been taken and are being taken,” Ms. Lagarde said while addressing a joint press conference with President Museveni at State House Entebbe on Friday afternoon.
She did point out that integration had its advantages and was perhaps one of the best options for the country to pursue its growth agenda. Uganda’s largest trade market for exports is East Africa but more significantly South Sudan. South Sudan was in March 2016 given the green-light to join the EAC.
Uganda also trades with the EAC and also enjoys lower tariffs on exports to the COMESA region, another regional body on the continent. Lagarde noted that Uganda had enormous potential for growth if it is part of a regional grouping.
The EAC is also pursuing a single currency and monetary union in order to further facilitate trade within the region. President Museveni noted that African countries needed to integrate further if they are to reap the benefits. He criticized countries that are taking isolationist policies and questioned how long they can sustain the inward approach.
“Those who are pushing isolationist policies will not be able to sustain the prosperity of their people. For us we are definitely working for the common market of East Africa and you see how much it is helping us. For instance, we produce 4 million tonnes of maize and we consume only one million. If we did not have that common market, that industry would have collapsed,” he said.
He pointed out that the isolationist strategy implemented by some countries would fail.
The joint press conference was addressed after both President Museveni and Ms. Lagarde held bilateral talks that discussed among others Uganda’s economic progress as it attempts to reach middle-income status by 2020. Lagarde has been in the country for the last two days on an official visit.