KAMPALA, Uganda — The East African Community (EAC) Monetary Affairs Committee has reaffirmed its commitment to introducing a single East African currency by 2031, pledging to deepen regional financial integration despite persistent challenges in meeting key economic benchmarks .
The commitment was made during the committee's 29th ordinary meeting, held on July 24 in Kampala, which brought together central bank governors and senior officials from EAC member states. The meeting was chaired by Dr. Michael Atingi-Ego, Governor of the Bank of Uganda and current Chairperson of the EAC Monetary Affairs Committee .
Despite heightened global uncertainties arising from elevated energy prices, increased shipping costs, and persistent geopolitical tensions, the East African region continues to demonstrate remarkable resilience. Regional economic growth is projected at 5.2 percent in 2026, significantly outperforming the sub-Saharan Africa average of 4.3 percent .
The committee further observed that inflationary pressures have continued to ease, with average headline inflation across the EAC declining to 6.7 percent in FY2025/2026, down from 9.6 percent in FY2024/2025 — reflecting the impact of prudent macroeconomic policies and improving economic conditions . Regional currencies are also expected to remain broadly stable, supported by diversified foreign exchange inflows and ongoing reforms .
While acknowledging progress in modernising monetary policy frameworks, strengthening macroeconomic surveillance, and promoting the use of the East African Payment System, the committee observed that partner states have made uneven progress towards meeting the agreed macroeconomic convergence criteria .
The EAC convergence criteria require all partner states to maintain:
- An inflation ceiling of 8 percent
- A fiscal deficit below 3 percent of GDP
- Gross public debt under 50 percent of GDP in net present value terms
- Foreign exchange reserves of at least 4.5 months of import cover
However, a review of the bloc's FY2026/27 Budget Speech reveals that only four of the eight member states currently meet the 8 percent headline inflation ceiling. Only three states have kept their fiscal deficits within 3 percent of GDP, four comply with the 50 percent public debt threshold, and just two have met the reserve-cover requirement of at least 4.5 months of imports .
"The East African Monetary Union remains a strategic objective that demands sustained commitment, policy harmonisation and strong regional institutions," said Dr. Atingi-Ego. "While our commitment to the Monetary Union is unwavering, we must accelerate implementation, strengthen peer review mechanisms and reinforce national action plans to ensure we remain on course towards a single East African currency by 2031" .
Beyond macroeconomic indicators, the currency project faces significant political hurdles. More than a decade after preparations began, the establishment of an East African Central Bank remains elusive as member states are yet to agree on which country should host the East African Monetary Institute (EAMI) — the institution meant to pave the way for a regional central bank .
The East African Monetary Union Protocol, signed on November 30, 2013, originally laid the foundation for a monetary union within ten years. However, progress has been slower than initially envisioned, with the timeline extended to 2031 . The EAMI was supposed to be operational by 2015 but has yet to be established .
Budgetary constraints compound the challenge. The EAC allocated just **$4.12 million** for the entire regional monetary roadmap in the 2026/27 fiscal year, representing only 3.71 percent of the bloc's total budget of $110.86 million .
Somalia, the EAC's newest member, attended the Kampala meeting and reaffirmed its commitment to regional monetary integration "in due course" a formulation that commits the country to the direction without committing it to the schedule . The Central Bank of Somalia is prioritising harmonisation of supervision, payment systems, and statistical frameworks with EAC standards before any discussion of currency convergence .
Rwandan representatives in the East African Legislative Assembly have previously highlighted that critical challenges persist in the preparations for the single currency. MP Fatuma Ndangiza noted that while the assembly has passed required laws, "at the level of the heads of state, there are agreements that need to be expedited" . She also observed that some member states are lagging behind in implementing crucial measures needed to pave the way for the single currency, adding that "achieving the single currency depends heavily on the full realization of the Common Market" .
Regional financial integration remains a cornerstone of East African development. The single currency promises to reduce transaction costs, save international reserves, eliminate exchange risk, and promote price convergence across the region . For businesses, a common currency would simplify regional trade by reducing reliance on the US dollar and boosting economic integration . The EAC's 7th Development Strategy (2026/27–2030/31) places renewed emphasis on accelerating the East African Monetary Union agenda .
However, the widening gap between institutional preparations and economic reality continues to test the bloc's ambition. The lack of any single country simultaneously meeting all four macroeconomic convergence criteria underscores how far the region remains from the monetary union it envisions .
