An Assessment of the Legal Framework for the East African Monetary Union (EAMU): A Case Study of the EAC and Uganda

The legal framework of the East African Monetary Union (EAMU) consists of both EAC legal instruments and Partner State legal instruments. The Community legal instruments designate the priority areas for harmonisation in preparation for the EAMU. These guides on which Partner State laws may be relevant to the EAMU. Laws on banking, taxation, payment systems, and other commercial laws regulate fiscal policy, monetary policy, exchange rate policy, surveillance, compliance, and payment systems. These are also the areas envisaged under the Protocol as priority areas for harmonisation. In our assessment of the legal framework, therefore, we ask whether the EAC legal instruments are effective. Issues like lack of strict timelines, requirement for consensus in making key decisions, failure to explore and provide for more successful theoretical and practical alternatives, and lack of enforcement and sanction mechanisms render these laws ineffective. Regarding Partner State laws, their divergence from one state to another, non-recognition of EAMU goals, provisions conflicting with EAMU goals, and political barriers implicit in their texts present challenges for actualisation of the EAMU. We make conclusions, and suggest actionable recommendations for stakeholders at all levels.