EAC Moves to Cut US Dollar Reliance with Regional Payment System
The East African Community (EAC) is developing an integrated payment and settlement system aimed at reducing member states' dependence on the US dollar and lowering the cost of cross-border transactions. Uganda's First Deputy Prime Minister and Minister for EAC Affairs, Hon. Rebecca Kadaga, outlined progress on the East African Payment System (EAPS) during a parliamentary plenary sitting on Tuesday, 3 November. The system currently connects the Real-Time Gross Settlement systems of Uganda, Kenya, Tanzania and Rwanda, enabling commercial banks to transfer funds and settle transactions in regional currencies. However, Burundi, South Sudan, the Democratic Republic of Congo and Somalia remain outside the platform, limiting full regional coverage.
To address these gaps, the EAC adopted a Cross-Border Payment System Masterplan in 2025, providing for the expansion and modernisation of EAPS, harmonisation of payment-service-provider licensing, and greater use of partner-state currencies in regional trade. Shadow Minister for EAC, Hon. Hakim Kizza, welcomed the initiative but called for a central bank-backed liquidity facility to ensure commercial banks have sufficient access to regional currencies, noting that liquidity shortages continue to force traders into costly double-conversion via the US dollar. Uganda's Parliament has been tasked with supporting legislative harmonisation, securing infrastructure funding, and monitoring the country's implementation of regional commitments as the bloc works toward an eventual single currency.
