Oscar Wilde once described economists as people who know the price of everything but the value of nothing. The same might be said of the politicians at the centre of the East African Community’s seemingly inexorable journey to the promised land of monetary and political union.
Like most other currency unions, this is a political enterprise. That in itself is not a bad thing. Dr. Gerard Lyons, Chief Economist at Standard Chartered, observes that politics was the driving force behind European monetary integration, which, despite the current problems with Greece, has been pretty successful.
According to Dr. Lyons, historically there have been four types of monetary unions. The first category has solid political unions that have ensured the monetary union's success. Examples include German Unification at the end of the last century; the longer lasting Italian Monetary Union which followed political unification in 1861; and the US Federal Reserve, established in 1913 as a decentralized system.
Patrick Gathara on understanding the East Africa community, and looking to the future.
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