* The two committees then convened a Joint Session from 23rd to 25th September to address matters requiring coordinated action by fiscal authorities and central banks

ARUSHA, Tanzania - The East African Community (EAC) is reviewing measures to strengthen the management of public finances and coordination of monetary policy as Partner States prepare for the East African Monetary Union (EAMU). The discussions focus on improving budget credibility, aligning tax policies and establishing practical arrangements for joint economic assessment and accountability.

The meetings, taking place in Arusha, United Republic of Tanzania, from 21st to 25th September 2026, began with separate sessions of the Committee on Fiscal Affairs (CFA) and the Economic Affairs and Coordination Subcommittee of the Monetary Affairs Committee (MAC) on 21st and 22nd September. The two committees then convened a Joint Session from 23rd to 25th September to address matters requiring coordinated action by fiscal authorities and central banks.

Addressing the Joint Session, the EAC Director of Planning, Mr. Aime Uwase, called for practical arrangements to support implementation of the EAMU Protocol and revised Roadmap.

"The matters before us are central to strengthening monetary and fiscal policy coordination, supporting macroeconomic stability, and advancing our shared regional integration objectives," said Mr. Uwase.

The Chairperson, Dr. Albert Musisi, Commissioner in Uganda's Ministry of Finance, Planning and Economic Development, called for accelerated implementation of the EAMU Roadmap to meet the target of introducing the EAC single currency in 2031. With about five years remaining, he urged members to work towards agreed timelines and reach agreement on the issues before the Joint Session.

"We therefore need to increase momentum to ensure that we deliver despite the global economic challenges that we are facing," said Dr. Musisi.

The CFA meeting covered progress in public financial management reforms, including stronger forecasting, cash management and expenditure controls to improve budget execution and prevent the accumulation of arrears. It also included a proposed Sub-Committee on Public Financial Management Modernisation and Harmonisation to monitor reforms and strengthen follow-up across Partner States.

Tax discussions focused on outstanding differences in excise duty rates, Value Added Tax (VAT) harmonisation and administrative tax procedures. Proposals included advancing excise harmonisation product by product where consensus exists, while continuing consultations on unresolved rates. The discussions also covered health taxes on tobacco, alcohol and sugar-sweetened beverages, and finalisation of the EAC Multilateral Agreement on Avoidance of Double Taxation to simplify cross-border taxation and give businesses greater certainty.

The Economic Affairs and Coordination Subcommittee discussed Kenya's experience with risk-based credit pricing, which seeks to improve transparency in lending rates and their responsiveness to monetary policy decisions. The meeting also examined the feasibility of synchronising the release of Monetary Policy Statements across Partner States, taking account of differences in national policy frameworks, data availability and decision-making calendars.

Joint action on fiscal discipline and macroeconomic convergence

The Joint Session is considering national timetables for progressively phasing out central bank overdraft facilities, alongside mechanisms to manage temporary government cash shortfalls. The discussions recognise differences in Partner States' legal frameworks, fiscal positions and financial markets, and the need for stronger cash-flow forecasting and government securities markets to support the transition.

A draft Framework for Coordinating Monetary and Fiscal Policy is also under review. It seeks to establish clear institutional responsibilities, regular information sharing and joint assessment of economic developments, with arrangements for monitoring agreed actions.

The Joint Session is also developing modalities for Partner States to pay their annual EAC contributions in local currencies. This work follows the adoption by the 25th Ordinary Summit of EAC Heads of State of a new financing formula, effective from 1st July 2026. The formula comprises 50 percent equal contributions and 50 percent assessed contributions, with the latter based on each Partner State's average Gross Domestic Product (GDP) per capita over the preceding five years. The discussions cover exchange-rate references, valuation and settlement arrangements, and management of foreign-exchange risk.

Mr. Uwase said the modalities were expected to "improve timely disbursement of contributions and support smoother budget execution".

The Joint Session is also developing terms of reference for a peer review mechanism to assess progress towards macroeconomic convergence, identify emerging risks and track corrective actions. This follows the 29th MAC meeting held in July 2026, which noted that no Partner State had met all four primary convergence criteria and called for stronger policy coordination, reinforced peer review and accelerated implementation of national convergence programmes.

The primary criteria require headline inflation of no more than 8 percent, foreign reserve cover of at least 4.5 months of imports, an overall fiscal deficit including grants of no more than 3 percent of GDP, and Gross Public Debt of no more than 50 percent of GDP in net present value terms. The deliberations will inform recommendations for consideration and follow-up through the relevant EAC policy organs.

Distributed by APO Group on behalf of East African Community (EAC).