The East African Community is developing an integrated payment and settlement system to reduce its dependence on the US dollar. According to Rebecca Kadaga, the first Deputy Prime Minister and Minister for East African Community Affairs in Uganda, the system will enable individuals and businesses to transfer funds securely, instantly, and affordably between EAC partner states. This will be achieved through a bank account, mobile-money wallet, or other authorised digital-payment channels.
The integrated payment system, known as the East African Payment System (EAPS), aims to establish a regional payment ecosystem. Kadaga stated that the system will reduce the cost of doing business, deepen intra-EAC trade, and provide a foundation for the proposed East African Monetary Union and eventual single currency. The EAPS currently connects the national Real-Time Gross Settlement systems of Uganda, Kenya, Tanzania, and Rwanda, enabling commercial banks to transfer funds across borders securely.
However, not all EAC member states are fully integrated into the platform. Burundi, South Sudan, the Democratic Republic of Congo, and Somalia are yet to be fully integrated, affecting the overall goal of full regional coverage. To address these challenges, the EAC adopted the Cross-Border Payment System Masterplan in 2025. The masterplan provides for the expansion and modernisation of EAPs, harmonisation of payment-service-provider licensing and regulation, and increased use of Partner States' currencies in regional transactions.
The implementation of the cross-border masterplan requires cooperation from various stakeholders, including the Ministry of Finance, Planning and Economic Development, Bank of Uganda, commercial banks, mobile-network operators, and fintech companies. Kadaga tasked these stakeholders with cooperating with her ministry to achieve effective implementation. She also emphasised the role of Parliament in supporting the harmonisation of Uganda's payment-system legislation with EAC frameworks.
The Shadow Minister for East African Community, Hakim Kizza, welcomed the development but urged the Ugandan government to create a central bank-backed liquidity facility. This facility will ensure that commercial banks have access to sufficient regional currencies, eliminating the need for forced reliance on the US dollar. Kizza noted that traders are currently forced to convert to the US dollar for cross-border transactions due to liquidity shortages in regional currencies at commercial bank levels.
Other stakeholders, including Molly Kamukama, the District Woman Representative, Kazo, emphasised the importance of attaining the EAC single currency to make the EAPs effective. The Speaker, Jacob Marksons Oboth, called for regular updates on the EAC integration and awareness campaigns among the public. He requested the Minister of EAC to prepare a status report on the integration, highlighting challenges and opportunities.
The development of the integrated payment system is a significant step towards reducing the region's dependence on the US dollar. The EAC's efforts to deepen intra-EAC trade and establish a single currency are expected to boost economic growth and cooperation among member states. The successful implementation of the EAPS will require continued cooperation and commitment from all stakeholders involved.
Key points
- The East African Community is developing an integrated payment and settlement system to reduce its dependence on the US dollar.
- The system will enable individuals and businesses to transfer funds securely, instantly, and affordably between EAC partner states.
- The implementation of the cross-border masterplan requires cooperation from various stakeholders, including governments, commercial banks, and fintech companies.
