The Central Banks of three East African Community (EAC) member states – Kenya, Tanzania and Uganda – have linked their banking systems in an effort to ease financial transactions among the regions, through the signing of an EAP agreement by their Heads of State.

The EAC, which has made huge gains in intra-regional trade among member states since 2005, has had to grapple with a lack of suitable and secure way to make and receive payments.

“[The new system] will make cross border payments easier and facilitate safe and efficient transfer of monetary value within the region,” commented Deputy Governor of Bank of Uganda, Louis Kasekende.

“It will be vital in promoting regional trade and enhancing economic integration,” Kasekende said. He added that it would especially benefit traders who move large sums of money.

The payment structure, which is a larger plan by the EAC economies to integrate their money and capital markets, comes after five heads – including Rwandan and Burundi presidents, signed the Monetary Union Protocol which is intended to result in a single currency in 10 years’ time.

Rwanda and Burundi are expected to join the integrated regional payment system at a latter date.

Last week, Kenya, Tanzania, Uganda, Rwanda and Burundi signed the first draft of a monetary union treaty which would see the East African region share the same currency, policies and central bank, within 10 years.