Effect of Oil and Gas Discoveries on the Proposed EAC Monetary Union

Recent discoveries of oil and gas by Kenya, Tanzania, and Uganda raise issues for the proposed EAC monetary union, not least for the other two countries, Burundi and Rwanda. Two issues need to be considered: the risk that oil and gas revenues may be mis-spent and contribute to a weakening of institutions—the ―curse of oil‖—and the likelihood that the two groups of countries will become more dissimilar and hence that a single monetary policy would not be suitable to both.