East African central bankers push single-currency launch to 2031

East Africa’s central bank governors have reiterated their commitment to introduce a single East African currency by 2031 even as they acknowledged that no member state had yet met all the macroeconomic targets required to get there.

The bloc sees a single currency as a solution to cutting trade-related costs, boost trade, and unite the region.

“Our commitment to the Monetary Union is not in question – but a candid review shows that we are consistently falling short of the convergence criteria, including the reserve and inflation targets that fall squarely within our central banks’ mandates,” Bank of Uganda Governor Michael Atingi-Ego said, while delivering his speech at the opening of the 29th Ordinary Meeting of the East African Community Monetary Affairs Committee in Kampala last week.

He added: “Continued divergence from these criteria risks eroding the credibility of our shared vision of monetary and political integration.”

The bloc signed the East African Monetary Union Protocol in November 2013, years after mooting the idea, and promised to launch a single currency within 10 years. However, that target remains elusive as the countries grapple to keep their inflation print, public debt, and foreign exchange reserves within the set limits.

A communique from the meeting credited partner states’ central banks with modernising and harmonising monetary policy frameworks, strengthening data and risk-management systems, deepening policy coordination through joint research, and expanding use of the East African Payment System for cross-border trade.

Atingi-Ego called for stronger peer-review mechanisms, binding national action plans, and tighter regional surveillance to speed up the pace of attaining the goal of a single currency.

Nevertheless, Atingi-Ego told the meeting that East Africa continues to outperform the rest of the continent economically, but warned that persistent gaps in meeting convergence criteria – including inflation and foreign reserve targets that fall within central banks’ mandates – risk undermining confidence in the monetary union project.

East African Community’s economies expanded by an estimated 5.3 per cent in 2025 and are projected to grow 5.4 per cent this year and 5.6 per cent in 2027, according to figures cited at the meeting.

The committee’s communique put 2026 regional growth at 5.2 per cent, still well above the continental average of 4.3 per cent. Average headline inflation in the region eased significantly, falling to 6.7 per cent in the 2025/26 fiscal year from 9.6 per cent a year earlier, and is expected to stay moderate provided tensions in the Middle East don’t escalate.

Regional currencies are also expected to remain strong against the dollar, supported by diversified foreign exchange inflows and ongoing reforms to domestic currency markets, according to the communique.

The backdrop, however, is a more uncertain global economy. The communique flagged heightened global risks tied to high oil prices and shipping costs linked to the conflict in the Middle East, and projected that world economic growth will slow to three per cent in 2026 from 3.5 per cent last year, even as continued investment in AI-related technology props up parts of the global economy. Global inflation is expected to increase on the back of higher energy prices.

GOLD, RESERVES AND AI

Facing a more volatile global environment, the committee endorsed efforts by partner states to build reserve buffers through domestic gold purchase programmes and by attracting diaspora remittances, which is part of a broader push to diversify sources of foreign exchange reserves and reduce vulnerability to global financial market swings.

On April 17, 2026, Bank of Uganda started purchasing gold from the local market as it kicked off its three-year pilot Domestic Gold Purchase Programme. Tanzania kicked off a similar gold domestic programme in September 2023, while Kenya already has plans on embarking on its own programme.

Atingi-Ego urged the region to move faster on regulating artificial intelligence and digital finance, calling for a harmonised EAC framework for regulatory sandboxes and innovation hubs, and a joint regional strategy for financial inclusion, warning that without shared governance frameworks the region risks regulatory arbitrage even as AI and big data reshape everything from inflation forecasting to payment systems.

“These technologies are reshaping labour productivity and income distribution, diversifying financial products and payment systems,” he said.

“They present real opportunities to improve the timeliness and quality of policymaking – but only when accompanied by governance frameworks commensurate with the risks they introduce,” he added.

The meeting also took stock of the EAC Cross-Border Payment System Masterplan, approved at the Committee’s previous sitting as the region’s strategic framework for modernising and integrating payment systems.

The communique said implementation has began, with annual work plans in place, priority initiatives identified, and financial and technical resources being mobilised. The Committee noted that the region’s banking sector remains stable and well capitalised, with adequate capital and liquidity buffers.

It, however, pointed out one growing concern: cybersecurity, which it said continues to pose a significant threat to financial stability across the region, prompting an agreement among governors to strengthen regional collaboration on the issue.

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