No East African Community Partner State had met all four primary requirements for the planned single currency, according to a July 2026 meeting. Regional officials are pressing ahead anyway. By 2031, they aim to align budgets, taxes and monetary policy, setting common rules for managing public money and national economies.
The requirements are headline inflation of no more than 8 per cent, foreign-reserve cover of at least 4.5 months of imports, an overall fiscal deficit of no more than 3 per cent of GDP, and gross public debt of no more than 50 per cent of GDP in net present value terms. Officials present the benchmarks as support for macroeconomic stability among countries sharing a currency. The gap between the rules and states’ current positions remains.
Rules for public money
Fiscal authorities and central bank officials met in Arusha from September 21 to 25, 2026, to discuss economic convergence and implementation of the East African Monetary Union Protocol and revised Roadmap. The Committee on Fiscal Affairs and the Economic Affairs and Coordination Subcommittee of the Monetary Affairs Committee held separate sessions before joining from September 23 to 25.
The Committee on Fiscal Affairs reviewed reforms to government budgets: stronger revenue and expenditure forecasting, improved cash management and tighter expenditure controls intended to prevent government arrears. Officials also considered setting up a Sub-Committee on Public Financial Management Modernisation and Harmonisation to monitor reforms across Partner States. The proposed machinery would reach into how governments forecast, spend and manage public income.
Tax rules are another target. Officials discussed differences in excise duty rates, Value Added Tax harmonisation and tax administration procedures. They proposed aligning excise duties product by product where states agree, while continuing consultations where rates differ. The talks also covered taxes on tobacco, alcohol and sugar-sweetened beverages, and completing the EAC Multilateral Agreement on Avoidance of Double Taxation. Officials say the effort would give cross-border businesses greater certainty and reduce complexities in regional trade and investment.
One currency, different national systems
The Economic Affairs and Coordination Subcommittee examined Kenya’s experience with risk-based credit pricing, which is intended to make lending rates more transparent and responsive to monetary-policy decisions. Officials also considered synchronising Partner States’ Monetary Policy Statements, while recognising differences in national policy frameworks, data availability and decision-making calendars. They’re planning a shared economic apparatus across states that don’t yet use identical systems.
The joint session is considering national timetables to gradually phase out central bank overdraft facilities, along with ways to manage temporary government cash shortfalls. The proposed approach accounts for differences in legal frameworks, fiscal positions and financial markets. Officials also cited better cash-flow forecasting and deeper government securities markets as important. A draft Framework for Coordinating Monetary and Fiscal Policy would clarify institutional responsibilities, provide for regular information sharing and joint assessments, and monitor agreed actions.
The 25th Ordinary Summit of EAC Heads of State adopted a new financing formula for annual EAC contributions, effective July 1, 2026. Half of each contribution will be equal; officials will assess the other half according to each Partner State’s average GDP per capita over the preceding five years. They’re working through exchange-rate references, valuation, settlement and foreign-exchange risk management. Aime Uwase, EAC Director of Planning, said the arrangements were expected to improve timely disbursement and support smoother budget execution.
The convergence test
A proposed peer-review mechanism would monitor convergence, assess progress, identify emerging risks and track corrective actions. The mechanism would add oversight to a project targeting a single currency by 2031. Aime Uwase called for practical arrangements to implement the Protocol and Roadmap, saying, “The matters before us are central to strengthening monetary and fiscal policy coordination, supporting macroeconomic stability and advancing our shared regional integration objectives.”
Dr Albert Musisi, Chairperson of the Joint Session and Commissioner in Uganda’s Ministry of Finance, Planning and Economic Development, urged faster implementation and called on Partner States to meet agreed timelines and settle outstanding issues. “We therefore need to increase momentum to ensure that we deliver despite the global economic challenges that we are facing,” Dr Musisi said. The officials’ timetable is clear. Every Partner State still falls short of all four benchmarks.