The establishment of a regional central bank and the adoption of a common currency by the East Africa Community are both in advanced stages of planning.
The EAC council of ministers will convene soon to adopt the proposal and decide on the location of the East African Monetary Institute, according to secretary general Peter Mathuki. The institute needs to be created before the bank may start operating. During the EAC staff retreat in Machakos, Mathuki stated, “We are going to finalize where to have the institution this year and the Constitution that will provide a blueprint for having one currency.”
We will have a common currency in the ensuing three to four years, he continued. Some nations have been competing to host the institute and have previously voiced their requests.
During the 42nd council of ministers meeting, which took place in Tanzania in the middle of last year, the debate on which nation would host was forced to be put on hold. Tanzania was ranked first (86.3%) in a verification exercise to determine which nation was most suitable, followed by Uganda, Burundi, and Kenya.
However, Kenya and Uganda banded together and rejected. The regional union, which consists of seven countries at the moment, had earlier predicted that it will have a common currency by 2024.
A panel established to look into the issue put forth a proposal last month to push back the establishment of the monetary union until 2031. After the Customs Union and the Common Markets Protocol, the East African Monetary Union is the third pillar of the EAC.
Mathuki, who endorsed the decision, claimed that it will simplify economic transactions among the member states while promoting free travel between them. In addition to other advantages, he noted that the way the region is built up allows for unrestricted travel and trade, as the Common Market Protocol calls for.