EAC to Establish Regional Central Bank by 2023, Aims for Single Currency by 2024
• The East African Community (EAC) will decide during the course of the year 2023 when and where it will locate the envisioned regional central bank.
• The setting up of the regional central bank is expected to help the EAC achieve its goal of attaining a single currency regime in three years.
• Eliminating non-tariff trade barriers is another step towards the EAC’s objective of enhanced movement of businesses and persons within the region.
The East African Community (EAC) is inching closer to its goal of having a single currency regime in place by 2024. This objective will be made possible with the establishment of the regional central bank, which is set to be located and operational by the end of 2023. With the setting up of the East African Monetary Institute (EAMI), the EAC will be able to harmonize member states‘ fiscal and monetary policies, thereby paving the way for the implementation of the single currency.
The EAC secretary general, Peter Mathuki, has revealed that the regional intergovernmental organization’s council of ministers will soon deliberate on the location of the regional central bank. He noted that this would be a crucial factor in ensuring that the process of establishing the regional currency is successful. The EAMI will be responsible for providing the region with the necessary financial infrastructure and governance for the implementation of the single currency.
The implementation of the regional currency is expected to have a positive effect on the region’s economy. This is because it will facilitate the movement of businesses and persons within the region, thereby boosting intra-regional trade. According to reports, intra-regional trade stood at $10.17 billion by September 2022.
Another factor that will aid in the successful implementation of the single currency is the elimination of non-tariff trade barriers. This will be done by streamlining the region’s taxation policies and regulations, as well as allowing for the free movement of goods and services across the region.
The EAC is confident that it will be able to meet its target of having a single currency regime in place by 2024. This will be a major milestone for the region, as it will ensure economic stability and development, as well as foster closer economic ties between the member states. The EAC is also optimistic that this will result in increased trade opportunities and improved living standards for the citizens of the region.