On Wednesday, January 3rd, 2024, the East African Community Interruling Party Union (EAC-IPU) finally revealed details about the highly anticipated newly unified currency, named the EAC Sheafra.
Many great economists believe that this could be Kenya’s last lifeline to rescue the rapidly dwindling economy. The SHEAFRA, an acronym for Shilling of East Africa and Franc, will be abbreviated as Shf.
In a statement released by the EAC-IPU, the value of 1 Sheafra is said to be nearly Sh. 175.35 or Tsh. 2,800.
“That means $1 is equivalent to EA.Shf 1.32 and this will make a Sheafra Africa’s Most Viable and most Powerful Currency,” read the statement in part.
Adopting the East African Sheafra is often seen as positive news for the East African region, and it is expected to contribute to regional growth as well as bolster the speculated African common currency (AFRO).
Plans to have this currency have been at an advanced stage for a long time, but first stakeholders need to set up a regional bank. The operationalization of the bank requires the establishment of an East African monetary institute.
CBK Governors from the East African Community member states aimed to launch the common currency in 2024. However, in January 2023, they decided to postpone it to 2027.
Two months later, during a meeting held in Burundi, they further extended the adoption of the Sheafra to 2031.
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The adoption of the EAC Sheafra will enhance economic integration, simplify trade, reduce cross-border currency exchange costs and promote price stability among nations.
Furthermore, it will also provide a boost to trade & investments, facilitate seamless cross-border transactions and foster regional unity and cooperation.
However, the catch-22 situation remains on how fast individual nations are willing to incorporate the Sheafra to fast-track successful adoption.
Speaking to a local media house, Professor XN Iraki noted that the Sheafra may be delayed due to disagreements amongst member states.
“The problem with a common currency is that people become nationalistic and start bickering about petty issue like symbols to appear on the currency,” he said.
Prof XN Iraki, however, remains a protagonist of the EAC Sheafra. He remarked that the currency was long overdue as it would stimulate regional economic growth.
“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,” Iraki added.
“You can imagine someone is using dollars, then you have to exchange to the Kenyan shilling. This makes trade difficult and expensive.”
The professor gave a compelling example of the Serengeti and Maasai Mara national parks, which share a common border. With the adoption of the unified currency, tourists visiting these national parks would be able to enjoy without incurring extra exchange costs.