East African Community (EAC) member states are working to reduce reliance on the US dollar in regional trade through an integrated payment and settlement system designed to make cross-border transactions faster, cheaper and easier.
The initiative seeks to enable individuals and businesses to transfer money between partner states using local currencies through bank accounts, mobile-money wallets and other authorised digital payment channels.
First Deputy Prime Minister and Minister for East African Community Affairs, Rebecca Kadaga, outlined the progress during a parliamentary plenary sitting on Tuesday, November 3, 2026.
Presenting a statement on the implementation of the East African Payment System (EAPS), Kadaga said the regional initiative would lower transaction costs, strengthen trade among member states and lay the groundwork for the proposed East African Monetary Union and eventual single currency.
“A fully integrated payment and settlement system will reduce the cost of doing business, deepen intra-EAC trade and provide an important foundation for the proposed East African Monetary Union and eventual single currency,” she said.
Kadaga explained that the existing EAPS connects the national Real-Time Gross Settlement systems of Uganda, Kenya, Tanzania and Rwanda.
The platform allows commercial banks in the four countries to transfer funds across borders and settle transactions in regional currencies, including the Uganda shilling, Kenya shilling, Tanzania shilling and Rwanda franc.
However, Burundi, South Sudan, the Democratic Republic of the Congo and Somalia are not yet fully integrated into the system, limiting its coverage across the regional bloc.
To address the gaps, Kadaga said the EAC adopted the Cross-Border Payment System Masterplan in 2025. The framework provides for expanding and modernising EAPS, harmonising licensing and regulation of payment service providers, and increasing the use of partner states' currencies in regional transactions.
She called for coordinated implementation involving the Ministry of Finance, Planning and Economic Development, Bank of Uganda, commercial banks, mobile-network operators and fintech companies.
Kadaga also urged Parliament to support the harmonisation of Uganda's payment-system laws with EAC frameworks, provide resources for digital and financial infrastructure, and monitor the country's implementation of regional commitments.
She said parliamentary support would be critical to integrating all eight EAC partner states into the payment system.
The Shadow Minister for East African Community Affairs, Hakim Kizza, welcomed the initiative but said regional currency shortages remained a major obstacle to reducing dollar dependence.
He called on the government to champion the establishment of a central bank-backed liquidity facility to ensure commercial banks have sufficient supplies of Kenyan, Tanzanian and Rwandan currencies.
Kizza argued that despite efforts to promote local-currency settlements, traders still have to convert their money into US dollars before completing some cross-border transactions because of limited availability of regional currencies.
“Despite the rhetoric of local currency settlement, traders are still forced to convert to the US dollar for cross-border transactions due to liquidity shortages in regional currencies at commercial bank levels,” he said.
He illustrated the challenge using a Ugandan trader purchasing goods from Kenya, who may have to convert Uganda shillings into US dollars before changing the money into Kenya shillings.
According to Kizza, the double conversion increases transaction costs and allows commercial banks to make significant profits from exchange fees.
Meanwhile, Kazo District Woman Representative Molly Kamukama said the adoption of a single EAC currency would be one way of strengthening the effectiveness of the regional payment system.
Speaker of Parliament Jacob Marksons Oboth called for regular updates on the progress of regional integration and greater public awareness of the process.
He asked Kadaga to present a comprehensive status report outlining the opportunities and challenges facing EAC integration.
“We need to know the status of our integration, generally. We have organised a marathon in November to create awareness. We request the Minister of EAC to prepare a status report on the integration, highlighting challenges and opportunities,” Oboth said.
The proposed payment reforms form part of wider EAC efforts to strengthen economic integration, facilitate regional trade and advance plans for a monetary union and eventual single currency.
