East Africa’s push to integrate its financial systems is taking a more immediate form, with regional central banks moving to improve cross-border payments even as the region’s long-standing plan for a single currency remains uncertain.
The development followed the 29th Ordinary Meeting of the East African Community (EAC) Monetary Affairs Committee (MAC) in Kampala, Uganda, where central bank governors discussed cross-border payment systems, foreign exchange reserves, economic convergence and cybersecurity.
For businesses, traders and individuals who regularly move money across East African borders, the changes could have a more immediate impact than the proposed single currency.
What you need to know
Cross-border payments: The EAC is implementing its Cross-Border Payment System Masterplan to reduce transaction costs and settlement delays.
Gold reserves: Central banks are purchasing domestic gold as part of efforts to diversify reserves and strengthen protection against external economic shocks.
Single currency: No EAC partner state currently meets all four primary macroeconomic convergence criteria required for a single regional currency.
Cybersecurity: Central banks are strengthening cooperation to protect increasingly interconnected digital financial systems.
Cross-border payments take priority
Sending money between Nairobi, Kampala, Dar es Salaam and Kigali can involve multiple payment systems, currency conversions, transaction fees and delays.
The EAC Cross-Border Payment System Masterplan seeks to address some of these challenges by improving connections between commercial banks and mobile payment platforms across member states.
The plan focuses on three key areas:
Direct interoperability: Connecting financial institutions and payment platforms to make cross-border transfers more seamless and reduce reliance on costly intermediary routes.
Lower transaction costs: Reducing the cost of payments could benefit SMEs, informal traders and businesses involved in regional trade.
Faster settlement: Improving clearing and settlement systems could reduce the time it takes for funds to move between countries.
For businesses operating across East Africa, more efficient payment systems could lower transaction costs and improve cash flow.
Central Banks look to gold and remittances
The meeting also came against a backdrop of economic uncertainty, despite relatively strong regional growth prospects.
East Africa’s regional economic growth is projected at 5.2% in 2026, compared with a 4.3% Sub-Saharan African average, while inflation has moderated to 6.7%.
However, high global oil prices and geopolitical tensions, including conflicts in the Middle East, continue to pose risks to regional economies.
Central banks are responding by diversifying foreign reserves, including through domestic gold purchases, while also seeking to strengthen formal diaspora remittance channels.
For countries that depend heavily on imported fuel, maintaining adequate foreign exchange reserves is particularly important because higher oil prices can increase demand for foreign currency and put pressure on local currencies.
The 2031 Single Currency Target Faces Challenges
The EAC continues to target a single regional currency by 2031, but significant economic hurdles remain.
The latest update indicates that no EAC partner state currently meets all four primary macroeconomic convergence criteria required for the introduction of a single currency.
Member states must balance spending on infrastructure and development with the need to maintain fiscal and inflation targets.
To monitor progress, central bank governors agreed to establish a regional peer review mechanism through which member states can assess one another’s economic performance and compliance.
This means that while the 2031 target remains on the EAC’s roadmap, a single East African currency is still a long-term project rather than an imminent reality.
Cybersecurity becomes a regional priority
Greater integration of digital payment systems also brings increased cybersecurity risks.
As mobile money, online banking and cross-border payment platforms become more interconnected, financial institutions face growing threats from cyberattacks and fraud.
The EAC central banks are therefore pushing for stronger and more coordinated security measures across financial institutions to protect the region’s digital financial infrastructure.
What This Means for East Africans
| Area | Expected Change |
|---|---|
| Cross-border transfers | Potentially faster and cheaper payments between EAC countries |
| Regional trade | Lower payment costs for SMEs and informal traders |
| Currency stability | Greater diversification of central bank reserves |
| Regional shopping | Easier payments for goods and services across borders |
| Digital finance | Stronger cooperation against cyberattacks and fraud |
| Single currency | Progress remains dependent on economic convergence |
The Bottom Line
The most immediate change in East Africa’s financial integration is unlikely to be a new regional currency.
Instead, it will be the gradual improvement of the payment systems that individuals and businesses already use.
If the EAC successfully implements its Cross-Border Payment System Masterplan, sending money between countries such as Kenya, Uganda, Tanzania and Rwanda could become faster, cheaper and more straightforward.
For traders, online businesses and ordinary citizens moving money across the region, that could prove to be a more significant development in the near term than the prospect of a single East African currency by 2031.
