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On Sunday, February 3rd, the East African Government introduced the much-speculated shared currency between the 7 nations; Kenya, DRC, Burundi, Rwanda, Tanzania, Uganda and South Sudan. These countries are expected to begin using the currency, which will be referred to as SHF.
The EAC is expected to start using the common currency that will be known as East African Sheafra (SHF)
The East African Government has officially announced the release of a common currency for members of the East African Community (EAC) called Sheafra that is yet to become the official money for all East African countries. Here’s wht we know so far.
Through their social media, the EAC, announced that the community consisting of countries; Kenya, Uganda, Tanzania, Rwanda, Burundi, the Democratic Republic of Congo, and South Sudan are to use the same currency Sheafra.
The introduction of the SHF marks a historic step towards facilitating trade and economic cooperation among member states.
SHEAFRA Meaning:
- SH: Shilling
- EA: East Africa
- FRA: Franc.
Those saying that Geographics of Burundi and Rwanda are excluded, it’s not true, Franc is used by Burundi and Rwanda, so its abbreviated in the Word #Sheafra Currency.
During the launch ceremony, it was revealed that the East African Sheafra would be issued in six denominations, ranging from SHF 5 to SHF 200. This comprehensive range aims to cater to various transactional needs within the region.
While the currency is currently in the specimen stage and not yet in circulation, its imminent introduction signals a new era of financial unity and collaboration within the East African region.
Benson Kipruto, the victor of the Tokyo Marathon, was slated to be the first individual to receive the currency, underscoring its symbolic importance.
The Key features of the East African Sheafra include its issuance by the Bank of East Africa, which will operate under the regulatory oversight of the Federal Republic of East Africa.
The East African Sheafra (SHF1 Sheafra) valued at US$0.76 Cent dollars, almost a Dollar; equates to Tsh2800 Tanzania Shillings, Kshs760 Kenya Shillings, RFr.1230 Rwanda Franc, USh3400 Uganda Shillings, BF.3103 Burundi Franc.
Importance of a Common Currency
The introduction of the SHEAFRA holds immense significance for East African countries. By harmonizing monetary policies and eliminating exchange rate uncertainties, the common currency is poised to enhance economic stability and stimulate intra-regional trade.
Moreover, it will foster a sense of unity and collective identity among member states, bolstering regional cooperation and development initiatives.
East African Community headquarters in Arusha, Tanzania
Other benefits of the SHEAFRA include:
- Enhanced Trade Facilitation: The SHEAFRA will streamline cross-border transactions, therefore reducing transaction costs and other current bureaucratic hurdles for businesses within East Africa.
- Price Stability: With a common currency, member states can mitigate inflationary pressures and promote price stability, hence fostering a conducive environment for investment and growth.
- Greater Financial Integration: The SHEAFRA will promote deeper financial integration, further facilitating capital flows and investment across East Africa.
- Increased Competitiveness: By eliminating currency exchange risks, businesses can operate more efficiently, enhancing their competitiveness in both regional and global markets.
Challenges and Disadvantages of a Common Currency
- Transition Period: The adoption of a common currency entails a transitional phase, during which member states must align their monetary policies and regulations. This however will no doubt pose logistical challenges.
- Economic Disparities: Divergent economic conditions among member states may pose challenges in implementing a uniform monetary policy that addresses the varying needs of each economy.
- Sovereignty Concerns: Some member states may perceive the adoption of a common currency as a relinquishment of monetary sovereignty. This therefore necessitates careful negotiation and consensus-building before adoption of the SHEAFRA.
Who Stands to Benefit from the SHEAFRA?
The launch of the SHEAFRA marks a transformative moment in East Africa’s journey towards economic integration and prosperity. By fostering unity and stability, the common currency sets the stage for a brighter future, where shared opportunities abound across the region.
However, only time will tell how strong the common currency will grow and gain acceptance just like the Euro or the Dollar which trade globally.
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