EAC on track to achieve single currency by 2024

KINSHASA, DR Congo

First Deputy Prime Minister and Minister for East African Community Affairs (EAC) Rebecca Kadaga has said that if everything goes according to plan, the East Africa Community will by 2024 have a Single Currency. 

Speaking during the Uganda-DR Congo Business Summit in Kinshasa, Ms Kadaga said member states are now working on the finer details to choose a country to host the East African Monetary Institute that will later become the East Africa Central Bank 

“By the end of this year, we should be knowing which country is hosting the monetary institute. The institute will be the East African Central Bank …  We expect that if we move according to plan, by 2024, we shall have a Single Currency,” she told more than 200 delegates at the summit. 

Already, Ms Kadaga noted Uganda, Tanzania, Burundi and Kenya have submitted requests to host the institute and the four countries are being reviewed for a decision.

Ms Kadaga, was responding to a concern in which traders had said they were finding difficulties to trade in certain currencies. 

The EAC now has seven member states including Uganda, Tanzania, Kenya, Rwanda, Burundi, South Sudan and DR Congo, which formally joined the bloc in April. However, only four, apart from DR Congo, have so far ratified the Single Currency Protocol. 

South Sudan remains an observer state because it has not yet harmonised internal laws and still has laws that prevent free movement of people. 

The Monetary Union is the third step in the EAC regional integration that is expected to be capped by Political Federation. Already, EAC member states have been working on full attainment of a Customs Union and a Common Market, amid a number of challenges which include non-tariff barriers, trade blockades and closure of border points. 

Whereas the EAC has set 2024 as the year of attaining the Monetary Union, a 2020 report by United Nations Economic Commission for Africa noted that divergences in monetary policies continue to stand in the way of attaining the single currency.  

“It is critical to examine how economies are converging before forming a monetary union,” the report said, noting that an assessment of ceilings for inflation, fiscal deficit, a gross public debt and a sufficient level of foreign exchange reserves had returned a lot of convergencies, which partner states need to align before forming a Monetary Union.   Speaking during the same summit, Mr David Livingstone Ebiru, the Uganda National Bureau of Standards (UNBS) executive director, said Uganda will ensure that all goods that are exported to DR Congo meet required standards.

The Uganda-DR Congo Business Summit, organised by Private Sector Foundation Uganda (PSFU) and the Office of the Presidential Advisor - Special Duties, seeks to help Uganda investors find investment opportunities in DR Congo. 

Mr Stephen Asiimwe, the PSFU executive director, said the event is a reflection of what the business community in the two countries want to engage in.