By Leonard Kamugisha Akida,
KAMPALA
The East African Community (EAC) member states remain divided over the proposed location of the regional central bank, a crucial institution for the planned East African Monetary Union.
Ugandan minister of East African Community Affairs and First Deputy Prime Minister, Rt. Hon. Rebecca Kadaga says the disagreement threatens to delay the implementation of a common currency, a key goal for economic integration in the region.
At the heart of the dispute is competition among member states—Kenya, Uganda, Rwanda, and Burundi, each vying to host the East African Central Bank (EACB).
Kadaga said that Rwanda withdrew it’s application to host the bank, and Tanzania was outrightly rejected because it already hosts three major EAC institutions including the headquarters, EALA and the East African Court of Justice. She added that three countries namely Uganda, Kenya and Burundi have expressed readiness to host the bank.
However, officials from the partner states have failed to reach a consensus, with each country presenting arguments based on economic stability, financial infrastructure, and strategic positioning.
Kenya, with its well-established banking sector and Nairobi’s status as a regional financial hub, has strongly pushed for hosting the institution. Uganda and Tanzania, however, have countered that a more neutral location should be chosen to ensure balanced regional development.
During a press briefing at the EAC ministry headquarters in Uganda, Kadaga expressed her commitment to common currency but acknowledged the growing tensions over the central bank’s location.
“I am concerned about the suffering of our people on the common currency, but we are still battling with where to establish a bank,” said Kadaga.
Kadaga underscored that another challenge facing the bloc’s ambitions for a unified economic future is that Central banks of the member states have not managed on the criteria to effectively converge currencies of other countries.
“You can’t have a convergence criteria with Kenya which is already a middle income state,”she said.
Meanwhile, Kadaga has retaliated his proposed for a single currency to run alongside the currencies for participating member states.
In November 2013, EAC member states signed the protocol on the establishment of the East African Community Monetary Union (EAMU) requiring partner states to progressively converge their currencies into a single currency in the community.
According to the Monetary Union Roadmap, EAMU was expected to be established in 2024, however, this was not realized and the timeline was revised to 2031.
“The Monetary Union was expected to be established in 2024 as per the Monetary Union Roadmap. However, it was not been realized and the timeline was therefore revised to 2031,” said Her Excellence Veronica Mueni Nduva, the EAC Secretary General.
Experts warn that prolonged disagreements could stall the implementation of the East African Monetary Union, which aims to introduce a single currency by 2031.
