EAC to Set up Single Currency Bank for 7 Member States in 2023: “It’ll Ease Trade”

• The East Africa Community set up plans to come up with the East African Monetary Institute which will lead to a single currency
• The seven-member states are required to agree on a strategic location to set up the Central Bank in 2023
• EAC Secretary-General Peter Mathuki said a council of ministers will meet to deliberate on the set-up before establishing the single currency

The East Africa Community (EAC) member states could soon start using a single currency to harmonise the movement of goods, services, and people.

EAC Secretary-General Peter Mathuki revealed plans are underway to set up the East African Monetary Institute (EAMI) in 2023.

EAC currency

The Central Bank of East Africa will be a vital component in the establishment of a single currency.

Mathuki said the council of ministers will meet to plan and agree on the strategic location of the Central Bank, after years of jostling among members to host the bank.

“The EAMI will be in place in 2023, in what will allow us to harmonize member states’ fiscal and monetary policies, then in about three years we will have a common currency in place,” said Mathuki, as quoted by the EastAfrican.

With a population of 300 million, EAC looks set to tap the existing market potential, reaching out to the entire continent.

The single currency will be a key pillar in harmonising monetary and fiscal policies, financial, payment and settlement systems, financial accounting and reporting practices, policies and standards on statistical information.

EAC regional trade volume

Data from the EAC secretariat showed that as of September 2022, intra-regional trade had hit $10.17 billion (KSh 1.3 trillion).

This is due to the relaxation of trade barriers and tariffs by the member states.

“257 NTBs have been cumulatively resolved since 2007. This is in tandem with the bloc’s goal to increase the volumes of intra-regional trade,” Mathuki added.

Kenya among EAC member states that applied to host EAMI

In June 2022, Uganda’s First Deputy PM Rebecca Kadaga exuded confidence that EAC will have a single currency by 2024.

Kadaga said member states will choose a host country for the East African Monetary Institute that will later become the East Africa Central Bank.

Kenya is among the four EAC member states that have submitted requests to host the momentary institute.

Source: TUKO.co.ke