EAC moves closer to integrated digital payments system

KAMPALA, UGANDA | THE INDEPENDENT | The Central Bank governors from the East African Community (EAC) have approved the regional cross border payments system master plan.

The EAC Cross-Border Payment System Masterplan, sets out strategic initiatives for payment systems modernisation and integration in the region.

The adoption of the Master plan should be an important milestone towards an efficient, safer, cheaper, transparent and more inclusive cross-border payments systems in the region.

This was at the 28th ordinary meeting of the EAC Monetary Affairs Committee (MAC) at Mombasa, Kenya, attended by all Governors or the eight Central Banks or their representatives.

The Master plan is aimed at enhancing digital integration and facilitate seamless cross-border transactions within the region, improve the speed, security, and affordability of digital payment.

Under it, the resulting interoperability of the payments framework will ensure that different payment systems can work together seamlessly.

Somalia and the Democratic Republic of Congo (DRC) were attending for the first time as new members.

The meeting was held against a backdrop of elevated uncertainties to the global economic outlook, arising from heightened trade tensions and persistent geopolitical concerns.

Additionally, global inflation is expected to decline at a slower pace due to the impact of higher trade tariffs, and the adverse impact of climate change.

A joint statement by the central bank heads after the meeting says the committee observed that economic performance in the EAC region had remained relatively resilient, despite the global shocks.

The meeting reviewed progress made in the implementation of the revised roadmap towards realization of the East Africa Monetary Union (EAMU) by 2031 and noted that significant progress has been made in the harmonisation of monetary and exchange rate policies.

Other achievements are; harmonizing principles and rules for the regulation and supervision of the region’s financial system; harmonisation of information technology infrastructure; enhancing risk and crisis management frameworks to ensure the stability of the region’s financial systems; adopting climate-risk awareness; promoting the use of the regional cross-border payments system; and harmonisalion of payment systems governance, legal, regulatory framework and standards.

The Governors pledged to continue working with the relevant authorities to expedite implementation of the revised EAMU roadmap.

They also noted that Partner States have made notable progress in the implementation of the EAC Macroeconomic Convergence Criteria.

The Governors pledged to continue working with the relevant authorities to expedite implementation of the revised EAMU roadmap.

The Committee noted that the financial sector in the EAC Region remains stable and resilient on account of adequate capital and liquidity buffers.

The main risks noted relate to decelerating growth in credit to the private sector, elevated cyber security threats, and AML/CFT (Antimony laundering/countering the financing of terrorism) compliance risks.

The outlook remains positive on the backdrop of monetary policy casing, recovery in new lending, and strong earnings.

To strengthen macroprudential policy surveillance in the region, the Committee approved the Memorandum of Understanding (MOU) for regional Information Sharing on Crisis Preparedness, Management and Resolutions in pre-, during, and post-crisis periods.

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URN