There are growing doubts about the regional economic bloc known as the East African Community’s ability to successfully launch a single currency by 2024, a report has said. One of the reasons for this is member states’ delays in meeting targets as set out in the roadmap.
The EAC considers the attainment of a single regional currency a top priority
The East African Community, a group of central banks in an African economic union is reportedly uncertain if the plans to create a single currency within the region by 2024 are going through. The central banks cite some member states’ failure to meet targets as set out in the roadmap as one of the reasons why the single currency is unlikely to take off as planned.
According to a East African report, six members of the East African Community believe that the common currency they envision will reduce costs for converting currencies. There are also hopes the single currency, whose attainment is one of the EAC’s priorities for the period between 2022 and 2026, will eliminate the exchange rate volatility that comes with cross-border trading.
In a communiqué reportedly issued on August 22, EAC stated that the delays and other obstacles meant that the region’s currency cannot be unified by 2024, as was planned.
“The Committee noted that there have been delays in realising targets set out in the EAMU [East African Monetary Union]roadmap, and there could be many challenges to timely implementation of the EAMU protocol. Therefore, the Committee pledged to work with the EAC Secretariat and other stakeholders in the EAC integration process to fast-track pending activities of the EAMU roadmap,” the EAC communique explained.
Harmonization between Monetary Policy and Forex Policy
Still, despite its acknowledgement that the process to establish a single regional currency has been beset by challenges, the EAC nonetheless claimed that partner states’ central banks had achieved some progress.
According to the East African report, some of the central banks’ achievements include the creation of the East African Monetary Union (EAMU) as well as the harmonization of forex and monetary policies.
Others include the Harmonization of Regulative Regimes, Improvement of Cybersecurity Frameworks and Application of Measures to Strengthen Payment Systems.
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