A Personal Assessment of the Net Benefits of EAMU for Rwanda

Monetary union in the East African Community (EAMU) needs to be seen in a wider context of EAC integration. Rwanda has much to gain from freer trade with her neighbours, investment in regional infrastructure, and access to a larger market for goods and services. If these were to be jeopardized by a failure to join EAMU–assuming it goes ahead—then there would no doubt be a net loss for Rwanda. But monetary union itself is unlikely to be very positive, and indeed may have negative consequences for Rwanda in some circumstances. The gains derive from the reduction of transactions costs from the use of a common currency within the EAC, as well as the possibility a regional central bank would deliver a more stable currency than national central banks.