The East African Community (EAC), a group of central banks in an African economic union is unsure whether plans to create a single currency for the region before 2024 are realized. One reason why the single currency will not take root is because of the failure of some member countries to meet the targets set out in the roadmap.
A report from the East African states that members of the six-nation East African Community believe the common currency will reduce costs for converting currencies. The EAC has set the goal of achieving a single currency in the 2022-2026 period. This will help eliminate cross-border volatility and reduce exchange rate volatility.
In a communiqué reportedly issued on August 22, EAC stated that the delays and other obstacles meant that the regional bloc could not have a single currency in 2024, as was planned.
‘The Committee observed that delays have been made in achieving the targets in the EAMU [East African Monetary Union] roadmap, and that there are many challenges that could hinder the timely implementation of the EAMU protocol. The EAC communique stated that the Committee had pledged to work closely with the EAC Secretariat, and other stakeholders, in order to accelerate the pending activities of EAMU protocol.
Harmonization of Monetary & Forex Policies
The EAC acknowledged that the creation of a single currency regionally has been difficult, but it claimed that there had been some progress in the central banks of partner countries.
The East African report cites the achievements of central banks such as the creation of the East African Monetary Union, as well as harmonization of forex-monetary policies.
Other accomplishments include the harmonization and improvement of regulatory frameworks, cybersecurity enhancements, and measures to strengthen payment systems.
