The 29th Ordinary Meeting of the East African Community (EAC) Monetary Affairs Committee (MAC), held in Kampala from 20–24 July 2026, reaffirmed the bloc’s commitment to establishing monetary union and a single currency by 2031, even as it acknowledged that member states remain some distance from meeting the macroeconomic conditions required to get there. The meeting took place against a softer global backdrop, with global growth projected to slow to 3.0% in 2026 from 3.5% in 2025, and inflation risks skewed upward on elevated oil prices and shipping costs tied to the Middle East conflict. The EAC region has nonetheless outperformed this trend: regional growth is projected at 5.2% in 2026, ahead of the Sub-Saharan Africa average of 4.3%, while average headline inflation across the bloc eased to 6.7% in FY2025/26, down from 9.6% the prior year.
The most consequential finding for markets is on convergence. No partner state has met all four primary convergence criteria, headline inflation capped at 8.0%, a fiscal deficit (including grants) below 3.0% of GDP, gross public debt no higher than 50% of GDP in net present value terms, and FX reserves covering 4.5 months of imports. This matters because full compliance across all six MAC members; Kenya, Tanzania, Somalia, Burundi, South Sudan, and Rwanda is a precondition for the union to proceed, meaning the 2031 timeline still hinges on fiscal consolidation and debt management progress that has not yet materialized region-wide. For sovereign credit and yield-curve watchers, this keeps convergence risk, rather than technical readiness, as the binding constraint on integration. On the institutional side, progress is more tangible: the Committee cited modernisation of monetary policy frameworks, stronger macroeconomic surveillance, deeper regional policy coordination, promotion of the East African Payment System, and continued capacity-building across central banks, and reviewed progress on the EAC Cross-Border Payment System Masterplan, the framework agreed at the previous session to integrate regional payment infrastructure, a development with direct relevance for cross-border settlement costs and trade financing within the bloc. On the policy response, governors agreed that partner states should diversify international reserves through domestic gold purchases and higher remittance inflows, alongside tighter regional policy coordination, and called for a peer review mechanism to strengthen macroeconomic surveillance and accelerate the convergence programmes. The reserve-diversification push is the most immediately tradeable signal here it points toward increased official gold demand and remittance-channel formalization as near-term policy levers, with knock-on implications for FX stability and reserve adequacy metrics across member states.
The communique confirms institutional momentum toward EAMU, payments integration, surveillance frameworks, and policy coordination are advancing, but the binding constraint remains fiscal and macroeconomic convergence, where no member state currently qualifies. For regional fixed income and FX positioning, the near-term takeaway is continuity rather than acceleration: infrastructure and coordination gains are real, but the 2031 target’s credibility will be determined by fiscal consolidation and reserve-buffer progress, not by the plumbing already in motion. (Start your investment journey today with the cytonn MMF, call+2540709101200 or email sales@cytonn.com)
