NAIROBI – Plans are in advanced stages for the East Africa Community – EAC bloc to adopt a common currency as well as setting-up a regional central bank – Secretary General, Peter Mathuki announced on Monday.
Mathuki said the council of ministers would soon meet to adopt the plan – and agree on the location of the East African monetary institute. For the bank to be operational, the institute has to be established first.
“We are going to finalise where to have the institute this year and the Constitution that will create a roadmap for having a single currency,” said Mathuki in Machakos during the EAC staff retreat; adding: “In the next three to four years, we (EAC) will have a common currency.”
Some countries have been battling to be the host nation for the institute and have already made their requests known.
The discussion over the country to host had to be suspended during the 42nd council of ministers’ meeting in Tanzania mid last year.
A verification exercise to identify the best suited country placed Tanzania on the lead at 86.3 per cent, while Uganda, Burundi and Kenya followed in that order.
Kenya and Uganda, however, teamed up to dismiss Tanzania’s abilities on the matter.
The regional bloc, which is currently made of seven countries had earlier anticipated to have the single currency by 2024.
Last month, a taskforce formed to look into the matter proposed to have the implementation of the monetary union delayed until 2031.
East African Monetary Union is the third pillar of the EAC after the Customs Union and the Common Markets Protocol.
Already, Kampala regime whose President – Yoweri Museveni spends sleepless nights in having the protocols of the EAC operational, has unceremoniously phased out its traditional passport – replacing the same with the EAC designed identification.
Supporting the move, Mathuki said this would ease the doing of business amongst the member states, while facilitating free movement of persons within the countries.
“Apart from other benefits, its set-up makes the region borderless such that our people can move and trade freely as envisioned in the Common Market Protocol,” he said.
It’s important to note that before 1966 the function of managing monetary affairs of Uganda was vested in the East African Currency Board. In 1966 the BoU Act created the Bank of Uganda – and soon after started issuing Uganda’s first currency.
Ever since, the Uganda Currency has changed seven times. The 1966, 1973, 1979, 1983 and 1986 bank currency issues resulted from the respective regime changes.
The 1987 issue has undergone a series of upgrading, though not because of political factors but in an effort to crack down counterfeits and ease transactions as well.
When a new government came into power in 1986 – a new currency with a completely different design was introduced. This currency had coins of 5 cents, 1 shilling, and 2 shillings.
In 1999 new denomination coins of 50, 100, 200 and 500 shillings were introduced and on December 31, 2000, Notes of Uganda Shilling 5, 10, 20, 50, 100, 200 and 500 were demonetized – ceasing to be legal tenders.
The new currency also maintained the same Banknote denominations of; 1000 shillings and 5000 shillings and was upgraded over the years.
In 1995, a new denomination of 10,000 was introduced. It was later upgraded, and on January 2, 2006, the upgraded 10,000 shilling Banknote was issued.
In 1999, Bank of Uganda issued out a new 20,000 banknote. It was also upgraded, and on November 1, 2004, the upgraded 20,000-shilling note was also issued.
On December 1, 2003, Bank of Uganda issued out a new 50,000-Shilling note.
The 1987 series would however cease to be legal tender on March 30, 2013. The public was allowed to exchange this currency at any commercial bank branch at full face value between March 31, 2013 and May 30, 2013; – but the same process continued at any of the central Bank’s branches until December.
The latest family of currency notes was issued in May 2010 with an inclusion of the Ugx2, 000 denomination under the themes; Gifted by Nature. All the issues before 1987 were demonetised.
And the only challenge remains whether the public won’t be rushed in the planned introduction a common EAC single currency as case was with the passport and other protocols.
