How Close Is East Africa to a Single Currency? The Latest Review Tells a Different Story.

East African central banks have retained 2031 as the target for introducing a common regional currency, but the latest assessment shows that important economic and institutional preparations remain incomplete.The commitment was renewed during the EAC Monetary Affairs Committee meeting held in Kampala on July 24. The meeting brought together central bank officials from Kenya, Uganda, Tanzania, Rwanda, Burundi, South Sudan and Somalia, alongside representatives of the EAC Secretariat. Discussions focused on the practical reforms required before the region can introduce a shared monetary framework, including stronger economic surveillance, closer policy coordination and deeper integration of financial systems.

Economic Differences Remain a Major Challenge
None of the EAC Partner States has yet met all four primary macroeconomic convergence criteria required for the monetary union. The uneven performance underscores the difficulty of aligning national economies closely enough to support a shared monetary framework. Without greater convergence, a common monetary policy could affect member economies differently because they face varying inflation, fiscal and growth conditions. This makes closer coordination necessary before the region can operate under a single monetary authority.

The committee said Partner States face the challenge of maintaining macroeconomic stability while continuing to finance critical infrastructure projects in an uncertain global environment. Higher oil prices, shipping costs and geopolitical tensions have added further pressure to the regional outlook.
To strengthen implementation of the monetary union roadmap, central banks agreed to establish a peer review mechanism for monitoring national economic performance. Governors also called for stronger operational arrangements under the EAC Five-Year Development Strategy for 2026/27–2030/31 and encouraged countries to diversify their sources of international reserves through domestic gold purchases and increased remittance inflows. Despite these challenges, the wider regional economy remains relatively strong. EAC growth is projected at 5.2% in 2026, compared with 4.3% for Sub-Saharan Africa. Average headline inflation also declined to 6.7% in 2025/26 from 9.6% in the previous financial year.

Payment Integration Could Deliver Earlier Benefits
While economic convergence remains incomplete, the EAC can still make progress by improving how money moves across the region. Faster and cheaper cross border payments would support businesses and households long before a common currency is introduced. Partner States have begun implementing the EAC Cross Border Payment System Masterplan, with annual work programmes being prepared, priority projects identified and technical and financial resources mobilised. The plan is intended to reduce transaction costs and settlement delays while improving links between national payment systems.
This work builds on the existing East African Payment System, whose use central banks are seeking to expand. Governors also reported progress in aligning monetary policy frameworks, improving data and risk management systems, and strengthening information sharing and joint research. Together, these reforms are intended to make the region’s financial institutions operate more consistently and support greater intra-EAC trade.

Deeper financial integration, however, also creates shared risks. The committee said the regional financial sector remains stable and resilient, supported by adequate capital and liquidity buffers, but identified cybersecurity as an emerging threat. As national payment networks become more connected, stronger regional coordination will be needed to protect them.