Uganda's Minister for East African Community Affairs, Rebecca Kadaga, told parliament on Tuesday, 3 November 2026, that the regional bloc is building an integrated payment and settlement system aimed at reducing member states' reliance on the US dollar. According to Zawya, Kadaga presented the plan during a plenary sitting as a statement on the implementation of the East African Payment System (EAPS).
She said a fully integrated system would lower the cost of doing business, strengthen trade within the EAC and lay groundwork for the proposed East African Monetary Union and an eventual single currency.
Why it matters
Most cross-border trade in East Africa still passes through the dollar, even when both parties use regional currencies. That adds conversion steps and costs for traders, and it leaves regional commerce exposed to dollar availability and pricing. A working regional settlement layer would let businesses pay each other in shillings and francs directly, which is why the plan carries weight beyond the payment industry itself.
The push also fits a wider pattern of African economies testing ways to lower transaction costs and reduce exposure to foreign currency swings. For the EAC, the payment system is presented as a practical first step toward deeper monetary cooperation.
What the existing system covers
Kadaga said the main mechanism in place today is the East African Payment System, which links the national real-time gross settlement systems of Uganda, Kenya, Tanzania and Rwanda. It allows commercial banks to move funds across borders and settle transactions in regional currencies, including the Uganda shilling, Kenya shilling, Tanzania shilling and Rwanda franc.
Coverage is incomplete. Burundi, South Sudan, the Democratic Republic of Congo and Somalia are not yet fully connected to the platform, which Kadaga said undermines the goal of reaching all partner states.
To close those gaps, she said the EAC adopted a Cross-Border Payment System Masterplan in 2025. The plan covers expanding and modernising the payment system, aligning how payment service providers are licensed and regulated across member states, and increasing the use of partner states' currencies in regional transactions.
The stated objective is a regional ecosystem where a person or business can send money securely, quickly and at low cost to any EAC partner state through a bank account, mobile-money wallet or another authorised digital channel.
Kadaga asked the Ministry of Finance, Planning and Economic Development, the Bank of Uganda, commercial banks, mobile network operators and fintech firms to work with her ministry on implementation. She also said parliament has a role in aligning Uganda's payment legislation with EAC frameworks, funding digital and financial infrastructure, tracking Uganda's delivery on regional commitments and supporting the eventual inclusion of all eight partner states.
Liquidity gap and the dollar detour
The Shadow Minister for EAC Affairs, Hakim Kizza, backed the direction of the plan but said Uganda should push for a central bank-backed liquidity facility. Such a facility, he argued, would keep commercial banks supplied with Kenyan, Tanzanian and Rwandan currencies and remove what he described as forced reliance on the dollar.
Kizza said traders still convert to the US dollar for cross-border deals because regional currencies are scarce at commercial bank level. He gave the example of a Ugandan trader buying goods from Kenya: the trader must first change Uganda shillings into dollars, then dollars into Kenya shillings. Banks earn substantial fees from that double conversion, he said.
His point speaks to a practical gap between policy and behaviour. A settlement system can technically support regional currencies, but if banks cannot readily source them, traders fall back on the dollar route. A liquidity backstop would address that constraint directly.
Molly Kamukama, the District Woman Representative for Kazo, said progress toward an EAC single currency would be one route to making the payment system work effectively.
Speaker Jacob Marksons Oboth asked for regular reporting on integration and for public awareness efforts. He said a marathon is planned for November to raise visibility, and he asked the EAC minister to prepare a status report on integration that sets out both challenges and opportunities.
The Zawya report was carried as a press release from an external provider, which stated that the content had not been edited and that it does not guarantee accuracy or endorse the views expressed.
What to watch: whether Uganda's finance ministry and central bank act on the call for a regional currency liquidity facility, and how quickly the four countries outside the current payment link are brought into it.
