Effects of Monetary Union on Promotion of Regional Trade in East Africa

Abstract

The purpose of this study is to imperially investigate the effects of monetary union in the promotion of regional trade in East Africa. Monetary union will strengthen regional trading efforts so as to build productive capacities and transform economies through increased trade. The research will be operationalized by means of a survey amongst principle secretary, administrative office and staff of the trade ministries in the respective countries. It will focus specifically on the effects of transaction cost, risk of exchange rate fluctuation, price transparency and single market on promotion of regional trade in East. What this research intend to bring out clearly is whether monetary union in East Africa will promote trade among member countries or not. The models that are used to study attitudes and perceptions in psycho-sociology sphere will be vastly employed to study ministry of trade ministries staff perceptions on the Effects of implementation of monetary union in East Africa. Secondary data was collected through review of various contents of various relevant reports and publications available on monetary union and international trade. Data was analysed using Statistical Packages for Social Sciences and found that adoption of a common currency among the East African countries will increase trade among the member countries.