The Governors of Central Banks in East Africa have agreed to fast-track the implementation of a common currency by 2031 after a set deadline of 2024 proved to be unviable.
The 26th ordinary meeting of the East African Community (EAC) Monetary Affairs Committee, which brings together CBK governors from member States, said progress is being made to ensure that the 2031 timeline for achieving a common currency is achieved within the set time frame.
The meeting, held in Burundi last week, noted that Partner States’ central banks have made significant strides towards the establishment of key institutions of the East African Monetary Union (EAMU).
The committee says some of the milestones achieved ahead of the implementation of the common currency include harmonisation of monetary and exchange rate policies, harmonisation of regulatory frameworks, implementation of measures to strengthen regional payments systems and enhancement of cybersecurity frameworks.
“Notwithstanding the progress, the Committee noted the revised timelines set out in the EAMU roadmap, with the new date of achieving the monetary union by 2031. Therefore, the Committee reaffirmed their commitment to work together and with the EAC Secretariat to fast-track implementation of activities in the revised EAMU roadmap,” reads a communique from the EAC.
According to the EAMU roadmap, four broad prerequisites need to be achieved ahead of the establishment of the monetary union and the first one includes the full implementation of the customs union and common market protocols.
So far, both the customs union and common market protocols are currently under implementation. Although much progress has been made, the protocols are not yet fully implemented.
The Committee noted that a lot of work still needs to be done in the area of cross-border payment systems and agreed to continue rolling out interoperability initiatives at the national level and enhancing the East African Payment System.
The single currency will ease business and movement of persons within the region, which would achieve the bloc’s goal of becoming as envisioned in the Common Market Protocol.
Meanwhile, the six Governors, including Kenya’s Patrick Njoroge, said the economic performance in the EAC region last year remained strong, recording GDP growth of 4.5 percent.
The officials said this performance was supported by strong growth in industry and services sectors following the easing of Covid-19 related restrictions, easing of global supply chain constraints, and continued public investment.
The governors said growth in the region was expected to improve, supported by a recovery in agriculture, continued strong performance of the services sector, and prudent monetary and fiscal policies.
The EAC comprises seven-member states with the latest entrant being The Democratic Republic of Congo which came on board in March last year, adding its more than 90 million market population to the regional trading bloc.
