East African Community to Establish Regional Central Bank

This year, a decision will be made to establish the East African Monetary Institute, which is necessary for implementing a single currency system.

The Secretary-General of the EAC, Dr. Peter Mathuki, stated that the Council of Ministers will be discussing the location of the EAMI. Recently, member states have been competing to host the EAMI due to the potential to attract foreign investment and become a financial center in the region.

“The EAMI will be in place this year 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,” he told journalists last week.

A single currency will facilitate commerce and travel within the region, helping the bloc to reach its goal of becoming a Common Market, as outlined in the Common Market Protocol.

The EAC is made up of 300 million people, and investors from around the world will have the opportunity to access this market and, as a result, the entire continent’s population. The single currency represents the third step in the EAC’s integration process, following the creation of a customs union and the strengthening of cooperation among member states through the Common Market Protocol.

Data from the EAC Secretariat indicates that trade within the region is increasing, reaching USD 10.17 billion by September 2022.

Dr. Mathuki attributes the increase in intra-regional trade to factors such as political cooperation among the leaders of the EAC and the easing of COVID-19 restrictions in the region. He also noted that high-level discussions among the Heads of State have led to the removal of many Non-Tariff Barriers that were hindering trade within the region.

“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,” Dr. Mathuki said.

Since President Samia Suluhu assumed office, Tanzania’s relations with Kenya have improved significantly and trade between the two countries exceeded Sh100 billion for the first time. The two nations have also resolved 23 regulations that hindered trade between them, resulting in a total of 257 non-tariff barriers that have been eliminated.

The EAC is made up of seven member states, with the Democratic Republic of Congo joining in March of last year, bringing its population of over 90 million to the regional trading bloc.

As a mineral-rich country, DRC already has established trade connections with most of the EAC member states through both bilateral agreements and multilateral affiliations such as the Southern African Development Community (SADC), of which Tanzania is a member.

In terms of peace and security, the Secretary-General stated that the EAC is focused on stabilizing the Eastern region of the Democratic Republic of Congo, a task that he said requires a political solution to be provided by the Heads of State.