EAST Africa's biggest economies have launched an
integrated real-time cross-border payments system designed to remove
bottlenecks to business and bolster intraregional trade, Kenya's central bank
said on Wednesday.
The East African Payments System (EAPS) is an early
step towards the creation of a monetary union within the five nation East
African Community (EAC) trade bloc, which member states hope to establish
within ten years.
"EAPS will facilitate trade within the region
and is a quick win for the EAC," the Central Bank of Kenya said in a
statement.
Each member state currently has its own banking
payment systems, meaning cross-border transfers take from one to two days,
bankers say.
EAPS will enable people in Kenya, Uganda and
Tanzania to make and receive payments in real time, speeding up the process of
commercial transactions. Rwanda and Burundi, whose banking structures are less
advanced, will join later.
A common currency remains a long way off, analysts
say. Member states first need to implement the free movement of labour, goods
and services, which has proved especially contentious in Tanzania.
Their economies will also need to meet
macro-economic criteria, including capping inflation at 5% and fiscal deficits
excluding grants below 6 percent of national output before embarking on a
monetary union.
It took the region's economies several years just to
agree on the wording of the draft protocol signed last month.
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