The EAC will establish a regional central bank this year

(From left) East African Community (EAC) Secretary General Dr Peter Mutuku Mathuki and East African Court of Justice (EACJ) President Nestor Kayobera attending the EAC retreat at Maanzoni Lodge, Machakos County on January 12, 2023. PHOTO | EVANS HABIL | NMG

A decision to establish the East African Monetary Institute — the Central Bank of East Africa — will be made this year, a key institution needed to implement the single currency regime.

EAC Secretary General Dr Peter Mathuki said the Council of Ministers is expected to plan the location of EAMI this year.

In the recent past, member states have scrambled to host EAMI, each trying to capitalize on its huge potential to attract foreign capital and become the region’s financial hub.

READ: Kenya, Tanzania resolve 23 trade barriers after Samia’s visit

“The EAMI will be established this year which will allow us to harmonize the fiscal and monetary policies of the member countries, and then in about three years we will have a common currency,” he told reporters last week.

A single currency will facilitate business and the movement of people within the region, thereby achieving the bloc’s goal of becoming what it was envisioned in the Common Market Protocol.

The EAC has a total population of 300 million, with investors from all over the world able to profit from the market and thus have access to the population of the entire continent.

The common currency marks the third pillar of EAC integration after the establishment of the customs union and the common market protocol that deepened cooperation among the partner states.

Statistics from the EAC Secretariat show that intra-regional trade within the regional bloc is on an upward trajectory, reaching USD 10.17 billion by September 2022.

dr. Mathuki attributed the growth in intra-regional trade to political goodwill among members of the EAC Heads of State Summit and the easing of Covid-19 restrictions in the region, among others.

He said the high-level talks between the heads of state had contributed to the removal of a number of non-tariff barriers (NTBs) that were hampering trade within the region.

“Since 2007, 257 non-tariff barriers have been cumulatively resolved. This is in line with the bloc’s aim to increase the volume of intra-regional trade,” Dr Mathuki said.

In just under two years since President Samia Suluhu came to power, Tanzania’s ties with Kenya have thawed and trade between Nairobi and Dar es Salaam has crossed the Sh100 billion mark for the first time.

The two neighbors also resolved 23 restrictive regulations that impeded trade between them, bringing cumulative non-tariff barriers to 257.

The EAC is made up of seven member states, with the latest member being the Democratic Republic of the Congo, which joined in March last year, adding its population of more than 90 million to the regional trading bloc.

READ: Efficient logistics are key to a more connected, diverse EAC market

DRC, a mineral-rich country, has already established trade ties with most EAC member states through bilateral agreements and at the multilateral level where it is linked to the Southern African Development Community (SADC) of which Tanzania is a member.

On peace and security, the Secretary-General said the EAC wanted to stabilize the eastern region of the Democratic Republic of Congo, a process he said required a political solution to be secured by heads of state.

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