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Outreach to enable small businesses to participate in regional trade under the Rapid Results Initiative recently announced by EAC Cabinet Secretary Peter Munya is commendable and timely. But while it must last 100 days, its benefits could be enhanced by tax measures aimed at facilitating cross-border trade.
A good example is the revision of financial laws to integrate a Regional ATM Switch, which was scheduled to take place in 2015. It aims to improve cross-border regional ATM interoperability and reduce the cost of doing business.
MOBILE NETWORK
The review would not only eliminate exchange rate fluctuations, but would also reduce cross-border transaction costs – the same expected benefits of the anticipated single currency.
Another measure would encourage a regional financial environment allows more robust cross-border fintech services. Having significantly reduced the bank 's barrier to the unbanked, telecom partnerships have not only been inclusive but their mobile money platforms have served as business enablers.
However, while one can make a cross-border transfer and receive money between mobile network platforms in different countries, it's all about the one thing you can do.
There is no cross-border mechanism similar to an ATM Visa card to allow payment by mobile money. One would have to withdraw money from a bank account to a mobile wallet and then transfer it to the recipient 's mobile money account. Each step has a cost
AEC CITIZENSHIP
Most of FinTech's services are "delineated" within distinct national boundaries, while the financial infrastructure requires a change . For example, the footprint of major Kenyan banks is to be used for cross-border traders and EAC citizens in general to benefit from advances in mobile technology, of which Kenya and the region has become a child of all kinds. poster, especially with the wide range of empowerment
Haste measures could lay the foundation for a smooth entry of a single currency into cross-border transactions. A study by the United Nations Economic Commission for Africa (UNECA) last October highlighted the challenges facing EAC countries in meeting the key macroeconomic targets for fiscal deficit. , inflation, public debt and foreign exchange reserves before the regime of the single currency by 2024.
STIMULING TRADE
Bill on the Monetary Institute of l & # 39; 39, EAC aiming to establish governance and the basic policy of the currency, is also behind schedule. It was scheduled for 2015.
Pbaded in April by the Legislative Assembly of East Africa, the bill awaits the approval of the six EAC member states.
Three other enabling institutions still need to be created with other bills. : The Statistical Office of East Africa; East Africa Monitoring, Supervision and Enforcement Commission;
These factors threaten to delay the long-term benefits of a monetary union in terms of reducing costs and stimulating cross-border trade and labor and capital movements.
million. Mwaura is a commentator on regional issues. [email protected] Twitter: @gituram
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