The rolling out of a common currency for the East Africa Community (EAC) has been touted by economic experts as a panacea to Kenya’s ailing economy.
Tentatively known as SHEAFRA, meaning Shilling of East Africa and Franc, the legal tender will be abbreviated as Shf.
Earlier, Central Bank Governors from EAC member states planned to launch the common currency in 2024 but postponed it to 2027 in a January 2023 EAC meeting held at Maanzoni Lodge in Machakos County.
In March 2023, the Central Bank Governors of East Africa decided to extend the adoption of a single currency to 2031 during a meeting held in Burundi.
Speaking to Kenyans.co.ke economist, Prof XN Iraki remarked that the rollout was long overdue and that SHEAFRA would empower the region economically.
“If you go to Europe and you are moving from one country to another, you do not need to keep on exchanging the currency. There are always some losses,” he explained the need to fast-track the process.
Prof Iraki further noted that not only is currency exchange costly, but it is also time-consuming. The common currency would facilitate trade among the 8 EAC member states as it would make it easy to trade between one country and another without incurring exchange rate costs.
“You can imagine someone is using dollars, then you have to exchange to Kenyan Shilling. This makes trade difficult and expensive," he explained.
Additionally, XN Iraki explained that with a common currency, tourism would be enhanced within the region.
For example, the Serengeti and Masai Mara National Parks share a common border, and tourists on a safari would be able to seamlessly enjoy the two parks without incurring extra exchange costs.
Iraki warned that rolling out of the currency could be delayed due to disagreements between EAC member states.
“The problem with a common currency is that people become nationalistic and start bickering about petty issues like symbols to appear on the currency,” he remarked.
