EAC deliberate on challenges, solutions to monetary union

The East African Community (EAC) is on the brink of establishing an economic union, with policymakers aiming to avoid the pitfalls encountered by other regional blocs worldwide. In a recent interview with CNBC Africa, Professor Dr. Tobias Knedlik from Fulda University discussed the implications of smaller economies within the looming integration. Dr. Knedlik emphasized that regional integration can be a win-win situation for both small and large countries, stressing the importance of ensuring that the population is aligned with the integration efforts. He pointed out that the decision on whether to focus solely on East African countries or include nations from Southern and Western Africa depends on the desires of the people. Drawing lessons from the European Union's challenges, particularly Brexit, Dr. Knedlik highlighted the significance of not overlooking financial institutions in the integration process. He underscored the need for diversified bank balance sheets to mitigate risks associated with holding excessive domestic assets, a lesson learned the hard way by the EU. Looking ahead, Dr. Knedlik emphasized the importance of ongoing dialogue with civil society to garner support for regional integration policies, cautioning that politicians must be transparent about the risks and benefits to ensure public buy-in and prevent backlash similar to what transpired in Brexit. Ultimately, building a sense of community and fostering open communication are seen as crucial steps in successfully navigating the complexities of monetary union formation within the EAC.