The East African Community (EAC) Secretariat has issued a statement urging the public to disregard reports circulating on social media regarding the introduction of a common currency for the region. According to the secretariat, the process of implementing a new currency is still underway, and any information suggesting otherwise should be ignored.

In a formal communication, the EAC Secretariat emphasized that the journey towards establishing a single currency among partner states is ongoing. They urged stakeholders to dismiss any rumors or misinformation circulating on social media platforms regarding the unveiling of new banknotes for the region. This clarification aims to prevent confusion and misinformation among the public.

The need for this clarification arose when a fake Twitter account, masquerading as an official EAC account, falsely announced the introduction of a new East African currency. Media personality Larry Madowo highlighted this issue, expressing concern over the proliferation of misinformation on social media platforms. The fake account, adorned with a grey government checkmark, deceived users into believing the false announcement.

Twitter’s verification system, indicated by gold and grey checkmarks, aims to authenticate official accounts and government-affiliated entities. While the gold checkmark denotes verified organizational accounts, the grey checkmark signifies government or multilateral organization accounts. Unfortunately, the misuse of these symbols can lead to the dissemination of false information, as witnessed in this instance.

The EAC partner states are actively working towards harmonizing critical policies and establishing the necessary institutions to achieve a single currency for the region by 2024, as outlined in the EAC Monetary Union Protocol. This union aims to enhance economic integration and facilitate cross-border trade by eliminating currency barriers within the region.

The establishment of a common currency, overseen by the East African Monetary Institute (EAMI), will ultimately lead to the creation of the East African Central Bank. This institution will be responsible for issuing and regulating the circulation of the single currency across member states. The adoption of a common currency is expected to yield various economic benefits while also presenting certain challenges.

One of the primary advantages of a monetary union is the reduction in transaction costs associated with currency exchange, promoting seamless trade and investment within the region. Additionally, a common currency eliminates exchange rate risk and facilitates price harmonization across borders, further bolstering economic integration.

However, the transition to a single currency entails certain costs and challenges, including the loss of sovereignty over monetary and exchange rate policies. Member countries must navigate potential asymmetrical shocks and ensure effective coordination of fiscal policies to maintain macroeconomic stability within the union.

The success of a common currency depends on the establishment of a robust institutional framework, fiscal discipline, and the insulation of the regional central bank from external pressures. By addressing these factors, the EAC aims to introduce a stable and sustainable currency that benefits all member states and promotes economic growth and development across the region.

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