Dar es Salaam. More than a decade after the East African Community (EAC) agreed to pursue a single currency, the region’s long-anticipated Monetary Union remains elusive, slowed by institutional delays, uneven economic convergence and mounting global pressures.
At the centre of the slowdown is the delayed establishment of key regional institutions, most notably the East African Monetary Institute (EAMI), which is expected to lay the groundwork for a future regional central bank.
According to the EAC Secretary General, Ms Veronica Nduva, prolonged decision-making, delays in selecting a host partner state and limited resources have collectively stalled progress.
She told The Citizen that meeting agreed macroeconomic convergence criteria has also proved difficult as partner states grapple with volatile global conditions, including geopolitical conflicts, climate-related shocks and recent shifts in United States foreign aid and trade policies.
“Divergent economic structures and varying levels of development among partner states continue to complicate harmonisation efforts and delay the realisation of the Monetary Union,” Ms Nduva said.
The EAC Monetary Union Protocol was signed on November 30, 2013 with the initial target to establish a single currency within 10 years (by 2024).
However, the bloc has revised its timeline, pushing the target date back for the Monetary Union to 2031.
Ms Nduva said the new deadline reflects a deliberate shift towards a more systematic approach aimed at building strong institutions and ensuring sustainable economic alignment before the adoption of a single currency.
Despite the delays, she noted that progress has been recorded under the convergence agenda, alongside steps to establish four anchor institutions: the East African Monetary Institute, the East African Statistics Bureau, the East African Surveillance, Compliance and Enforcement Commission, and the East African Financial Services Commission.
“The legal process for operationalising the EAMI has been completed, and the EAMI Act came into force on July 1, 2021,” she said, adding that the Council of Ministers is still in the process of selecting the host Partner State.
Bills establishing the remaining three institutions were passed by the East African Legislative Assembly but returned for further review following comments from partner states.
Under the revised roadmap, the partner states are required to meet four convergence criteria by 2028 and sustain them for three consecutive years leading up to 2031.
These include keeping headline inflation below eight percent, maintaining foreign exchange reserves equivalent to at least 4.5 months of imports, limiting the overall fiscal deficit to three percent of GDP including grants, and keeping gross public debt below 50 percent of GDP in net present value terms.
Ms Nduva said performance across the bloc remains uneven. In 2024, five Partner States—Tanzania, Kenya, Uganda, Somalia and Rwanda—met the inflation criterion.
Kenya, Rwanda and Tanzania achieved the reserve requirement, while Tanzania, Somalia, Uganda, Burundi, South Sudan, the Democratic Republic of Congo (DRC) and Rwanda met the debt-to-GDP threshold. Only Somalia, South Sudan and the DRC met the fiscal deficit target.
Beyond fiscal and monetary indicators, institutional integration is also progressing at different speeds.
While the region has advanced in payment systems integration through a Payment Systems Masterplan adopted by central bank governors, and fiscal coordination has improved through Medium-Term Convergence Programmes, full alignment remains incomplete.
“EAC partner states’ central banks have harmonised their monetary policy operations by adopting interest rate-based frameworks,” Ms Nduva said, noting that differences in implementation capacity still persist.
The bloc’s recent expansion to include the DRC and Somalia has further complicated the process, as new members must align with existing standards while managing domestic economic challenges.
Commenting on the delays, Bank of Tanzania Governor Emmanuel Tutuba said all Partner States remain committed to the Monetary Union roadmap but warned that success depends on collective compliance and timely institutional set-up.
He said Tanzania has already met several benchmarks, including maintaining inflation within the three-to-five percent range and sustaining stable economic growth, supported by efforts to strengthen the fiscal position through business formalisation and improved revenue collection.
Mr Tutuba also highlighted Tanzania’s rapid adoption of digital payment systems, including the Tanzania Instant Settlement System (TISS), noting that greater digitisation enhances transparency and tax collection across the region.
“Digital payments are secure, traceable and support stronger fiscal outcomes, not only for Tanzania but for the EAC as a whole,” he said
An EAC report shows that all partner states have now developed technical criteria to guide the transition, including commitments to low inflation, controlled deficits, sustainable public debt and stronger foreign exchange reserves.
Central banks are working towards full harmonisation of monetary and exchange rate policies by 2026, although some are still transitioning to forward-looking, interest rate-based frameworks.
The persistence of delays reflects the complexity of aligning diverse economies under a single monetary framework—an ambition that, while still alive, continues to demand patience, political will and institutional discipline.
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