EAC Central Banks Urged to Speed up Cross-border Payments to Boost Trade

The East African Community (EAC) Secretary General, Veronica Nduva, has called on Partner States' Central Banks to adopt advanced technology to enhance cross-border payments within the EAC Common Market. Speaking at a two-day forum in Arusha, Tanzania, Nduva highlighted key challenges, such as limited capacity and lack of interoperability, that have hindered the uptake of the East African Payments System (EAPS), launched in 2014 to streamline payments in the region.

Nduva stressed the importance of seamless cross-border payments to foster trade and investment, adding that central banks must build public trust in new payment technologies. She also noted that the East African Monetary Union Protocol requires Partner States to harmonise their payment systems as part of efforts towards a single currency.

While digital financial services have improved domestic payment systems across the EAC, cross-border transactions remain slow and expensive, with most banks still relying on foreign correspondents for regional payments. Nduva urged the EAC to build on national successes to create a more efficient and integrated regional payment system.

The forum, attended by Development Partners and experts from the EAC Secretariat, also featured input from the Bill and Melinda Gates Foundation, which pledged support for initiatives aimed at improving financial inclusion. TradeMark Africa’s Chief of Programmes, Allen Assiimwe, highlighted the high costs faced by cross-border traders due to currency exchanges, stressing the need for a more robust payment system.

Dr. Joy Maria Kategekwa from the African Development Bank emphasised the importance of building capacity and interoperability in regional payment systems, citing the Pan-African Payment System (PAPSS) as a key model for streamlining cross-border transactions across Africa.