Plans by the East African Community (EAC) to set up a regional central bank and adopt a single common currency has begun to look like a success story as all member states are hoping to attract foreign capital and become the region’s financial hub.
While the formation of a regional central bank has been hailed as a move in the right direction, the community is considering “having the single currency by 2027”.
EAC Secretary-General Peter Mathuki, said the East African Monetary Institute and the Central Bank of East Africa will be set up this year to help harmonize member states’ (comprising of Burundi, DRC, Kenya, Rwanda, South Sudan, Tanzania and Uganda) fiscal and monetary policies.
Mr Mathuki added that in about four years, a common currency will be rolled out to ease business and movement of persons within the region, while unlocking the benefits of the bloc’s ‘Common Market Protocol’ goal.
“The intra-regional trade growth can be attributed to political goodwill among the members’ heads of state and the relaxation of COVID-19 restrictions in the region amongst others,” said Mathuki.
The common currency marks the third pillar of integration of the EAC after the establishment of the customs union and the common market protocol that deepened cooperation among the EAC member states, and comes at a time when intra-regional trade within the regional bloc is on an upward trajectory, standing at $10.17 billion as of September 2022, according to the EAC, which currently has a collective population of 300 million.
