EAC Single Currency Target Pushed Further to 2031

(NAIROBI) – The East African Community (EAC) has postponed making a decision on where to locate the East African Monetary Institute (EAMI), raising further uncertainty about the timetable for the regional monetary union. The delay has left Kenya’s long standing bid to host the transitional institution in question.

Officials say the Council of Ministers has agreed that instead of focusing only on the EAMI, the allocation of all unhosted EAC institutions will now be reviewed together. A senior official who attended the discussions said the issue was now broader than Kenya’s bid.

The Council had previously directed the EAC Secretariat to convene an extraordinary meeting in February 2025 to discuss these unhosted institutions. However, that meeting has not yet been held. Kenya’s Cabinet Secretary for EAC Affairs, Beatrice Askul, confirmed that the Council has not sat on the matter but insisted Kenya remains committed to pursuing the bid.

Kenya has campaigned to host the EAMI to strengthen investor confidence and position Nairobi as a regional financial hub. Uganda and Tanzania have also shown interest. A verification report released in 2023 ranked Tanzania as most suitable, followed by Uganda, Burundi and Kenya.

Kenya, Uganda and South Sudan rejected the report, citing a lack of transparency. Tanzania and Burundi supported it, while Rwanda and the Democratic Republic of Congo urged compromise.

In November 2024, the Council redirected the process toward a review of all unhosted EAC bodies, which include the EAC Bureau of Statistics, the EAC Financial Services Commission, and the EAC Compliance, Surveillance and Enforcement Commission.

Currently, Arusha hosts the EAC Secretariat, the East African Court of Justice, and the East African Legislative Assembly. Uganda hosts several institutions, including the Inter-University Council for East Africa and the East African Development Bank. Rwanda hosts the EAC Science and Technology Commission, Burundi hosts the East African Health Research Commission, and Kenya hosts the Lake Victoria Basin Commission.

The delay in agreeing on a host country for the EAMI has slowed progress toward launching a regional single currency. This monetary union was initially planned for 2024 but has now been postponed to 2031. Partner states have struggled to meet key economic convergence targets, including limits on inflation, debt, budget deficits, and foreign reserves.

The monetary union is the third stage of EAC integration after the Customs Union and Common Market. The ultimate goal remains the creation of a Political Federation.

For South Sudan, the delays raise concerns about how quickly the region will advance toward deeper integration. A regional single currency could reduce trade costs and improve financial stability for member states, including South Sudan, which continues to grapple with exchange rate volatility.

Selected EAC Institutions and Host Countries

The EAC Secretariat did not immediately respond to requests for comment.