East Africa moves towards one single currency

The formation of a single currency in the East African region has come one step closer. The parliament of Uganda has passed a motion approving the establishment of the East African Monetary Union, in which Uganda, Kenya, Tanzania, Rwanda and Burundi are to adopt a single common currency.

The Africa Report writes that establishing a monetary union can promote and maintain monetary and financial stability in the region. It is also aimed at facilitating economic integration to support sustainable growth and development of the East African Community. The single currency, which has not been given a name yet, but in due time it will be the legal tender of the area.

To form the Union, Uganda, Kenya, Tanzania, Rwanda and Burundi agreed to the terms to harmonise and coordinate their fiscal policies, formulate and implement a single monetary policy and a single exchange rate policy, and to develop and integrate financial payment and settlement systems. The states will also integrate their financial management systems and harmonise their financial accounting and reporting practices.

Though South Sudan and Somalia recently applied to join the five member regional body, these countries will not use the currency until they are accorded full membership.

Further reading on theafricareport.com

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