EAC central banks admit bloc off track for 2031 single currency

East African Community (EAC) central bank governors have admitted that no member state has yet met all the economic conditions required to adopt a single regional currency, raising fresh concerns over whether the bloc can meet its 2031 target.

Meeting in Kampala on Friday, the governors reaffirmed their commitment to establishing the East African Monetary Union (EAMU) by 2031 but warned that uneven progress in achieving agreed macroeconomic targets could undermine the credibility of the project unless governments accelerate fiscal and economic reforms.

The governors made the assessment during the 29th Ordinary Meeting of the EAC Monetary Affairs Committee chaired by Bank of Uganda Governor Michael Atingi-Ego.

“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,” Mr Atingi-Ego said.

The committee noted that while Partner States had made progress in harmonising monetary policy frameworks, strengthening data systems and integrating payment infrastructure, none has attained all four primary macroeconomic convergence criteria required before introducing a common currency.

The findings pile pressure on governments, including Uganda’s, to contain inflation, reduce fiscal deficits, strengthen foreign exchange reserves and keep public debt within sustainable levels.

To close the gap, the governors agreed to introduce a regional peer-review mechanism aimed at strengthening macroeconomic surveillance and ensuring countries remain accountable for implementing agreed reforms.

Mr Atingi-Ego said the bloc also needs binding national action plans, harmonised policy frameworks and transparent compliance mechanisms if it is to remain on course for monetary union.

“We should examine candidly the efficacy of our convergence criteria in light of new economic realities and the uneven progress our Partner States have made… and propose concrete measures to accelerate our shared path toward a single currency by 2031,” he said.

Despite the implementation challenges, the governors reported progress in expanding the East African Payment System, improving monetary policy coordination and enhancing analytical capacity among central banks.

The committee also agreed to align implementation of the EAC Five-Year Development Strategy for 2026/27 to 2030/31 with the roadmap for introducing the common currency.

The meeting brought together governors and senior officials from Uganda, Kenya, Tanzania, Rwanda, Burundi, South Sudan and Somalia, alongside representatives of the EAC Secretariat.

The governors observed that the regional economy remains relatively resilient despite a challenging global environment marked by elevated oil prices, geopolitical tensions and higher shipping costs.

Regional economic growth is projected at 5.2 percent in 2026, above the Sub-Saharan African average of 4.3 percent, while average headline inflation across the EAC declined to 6.7 percent during the 2025/26 financial year from 9.6 percent the previous year.

However, they identified rising public debt, cybersecurity risks and increasing global economic uncertainty as key threats to macroeconomic stability.

The committee also urged central banks to diversify international reserves, including through domestic gold-purchase programmes, deepen regional payment integration and develop common approaches to regulating artificial intelligence in financial services.

Although the 2031 deadline remains unchanged, the governors acknowledged that introducing a single East African currency will ultimately depend on whether Partner States can translate political commitment into measurable compliance with the macroeconomic conditions required for a stable monetary union.