Secretary General Peter Mathuki on East Africa's journey to a single currency

The East African region has been on a journey towards a common currency since 2005, facing numerous challenges along the way. The push back by a technical working group has led to a proposed deadline extension to 2031 from the initial target of 2027. In a recent interview with CNBC Africa, Peter Mathuki, the East African Community Secretary General, shed light on the progress towards a single currency for the region. Mathuki emphasized the importance of setting prerequisites for a common currency, including harmonizing physical and monetary policies within the region. He mentioned the establishment of the East African Monetary Institute (YAMI) as a crucial step towards achieving this goal. Verification missions have been sent to partner states to assess their readiness to host the institute, with countries expressing interest in the initiative. The Secretary General expressed optimism about the establishment of YAMI and highlighted the need for a roadmap to ensure not only a common currency but also harmonized policies. He mentioned the current discussions at the council level to finalize the location of the institute and set timelines for the implementation of a common currency. While the initial deadline for the common currency was 2024, Mathuki acknowledged that the focus is currently on setting up the Monetary Institute. He proposed a timeline of four years from the establishment of YAMI for the implementation of a common currency, suggesting that by 2027, East Africa could have a single currency. Mathuki addressed concerns about potential stumbling blocks, stating that efforts have been made to harmonize economic policies and ensure a well-thought-out process. He emphasized the need for consensus among central bank governors and experts to lay a strong foundation for the common currency. Regarding fiscal discipline and debt harmonization, Mathuki clarified that harmonization does not imply uniformity but rather standardization to create a common framework for monetary and fiscal policies. He emphasized the importance of good governance and adherence to protocols to strengthen the economies of East African countries. On the topic of intra-East African Community (ESC) trade, Mathuki expressed satisfaction with the recent milestone of reaching a $10 billion mark. However, he highlighted the potential for further growth and set a target of achieving 40% intra-ESC trade in the next five years. He emphasized the role of the common external tariff in promoting local production and increasing trade within the region. Addressing the crisis in the eastern part of the Democratic Republic of Congo (DRC), Mathuki underscored the importance of stabilizing the region to facilitate trade and economic growth. He noted the impact of the crisis on businesses and emphasized the need for stability to unlock the region's potential for trade and investment. In conclusion, Mathuki reiterated his commitment to advancing the East African region towards a common currency and fostering economic integration. With a focus on setting up the East African Monetary Institute and harmonizing policies, he remains confident that East Africa can achieve a common currency by 2027, driving economic growth and regional cooperation.