Question

The E.A.C which has 7 member states has made strides or benefits in which area? Discuss, challenges in any attempt to establish EMS financial system of one currency which has been faced with obstacles and explain in the context of East African situation how it can be sorted out.

Answer 1

The EAC has made strides in economic integration and trade cooperation, but faces challenges in establishing an EMS financial system with a single currency. These challenges can be addressed through increased collaboration and coordination among member states, as well as learning from the experiences of other regional integration blocs like the EU.

Step-by-step explanation:

The East African Community (EAC) is a regional intergovernmental organization consisting of 7 member states, including Kenya, Uganda, and Tanzania. The EAC has made significant strides in the area of economic integration and trade cooperation among member states. One of the key benefits of the EAC is the establishment of a common market, which allows for the free movement of goods, services, and people within the region.

However, the establishment of an East African Monetary System (EMS) and a single currency has faced challenges and obstacles. One of the main challenges is the need for member states to align their fiscal and monetary policies to ensure stability and avoid inflation. Another challenge is the need for harmonization of financial regulations and systems across member states.

To address these challenges, the East African situation can be sorted out through increased collaboration and coordination among member states. This includes aligning fiscal policies, adopting common financial regulations, and building capacity in monetary policy frameworks. Additionally, member states can learn from the experiences of other regional integration blocs, such as the European Union, in overcoming similar challenges.