Bankers in Uganda are calling for a wider adoption of the East African Regional Payment System. They believe this system can reduce the region's reliance on the US dollar. The system, developed by the East African Community, aims to make cross-border transactions easier and less costly. Despite its potential, the system has not gained widespread use. Bankers think a mass awareness campaign is needed to educate people about its benefits.
The East African Payment System allows for easier conversion of currencies within the eight-member East African Community. However, it has not become the preferred choice for businesses. Instead, they continue to use SWIFT, a widely used international payment system. Bankers attribute this to a lack of awareness about the East African Payment System's advantages. They also point out that it currently relies on the SWIFT network, which can be a limitation.
To increase the system's usage, bankers suggest that it needs a separate and independent infrastructure. This would allow it to operate more efficiently and reduce its reliance on SWIFT. The East African Community has been working to promote economic integration among its member states. The payment system is part of these efforts, aimed at making trade and investment easier within the region.
The East African Community consists of eight member states: Burundi, Kenya, Rwanda, South Sudan, Tanzania, Uganda, Democratic Republic of Congo, and Seychelles. These countries have been working to deepen economic ties and promote cooperation in various areas. The payment system is one of the initiatives aimed at achieving this goal. Its success could have a positive impact on trade and economic growth in the region.
Uganda, like other member states, stands to benefit from the wider adoption of the East African Payment System. By reducing transaction costs and making cross-border payments easier, businesses in Uganda can become more competitive. This, in turn, can lead to increased trade and economic growth. The Ugandan government has been supportive of the East African Community's efforts to promote economic integration.
The call for a wider adoption of the East African Payment System comes as the region seeks to increase intra-regional trade. By promoting the use of local currencies and reducing reliance on the US dollar, the system can help to boost economic growth. The East African Community has set a target of increasing intra-regional trade to 50% of total trade by 2030. The payment system is seen as a key component of this effort.
The East African Community will need to work with banks, businesses, and other stakeholders to promote the payment system. A mass awareness campaign will be crucial in educating people about its benefits. By working together, the region can increase the adoption of the East African Payment System and reap its benefits. The system's success will depend on the support of all stakeholders.
Key points
- Bankers call for wider adoption of East African Regional Payment System
- System aims to reduce reliance on US dollar
- Separate infrastructure needed for independent operation
