World Bank issues $16m financial services sector grant to EAC

Feb 17, 2011

The World Bank has signed a $16 million (€11.8 million) grant agreement with the East African Community (EAC), to help finance the first phase of an initiative that will transform the EAC’s financial services sector.

Phase one of the EAC Financial Sector Development and Regionalisation Project, which will be implemented in two stages over a nine-year period, is due to start this year.

"The harmonisation of the financial services sector will play a key role in unlocking some of the benefits of the Common Market by removing barriers to the free movement of capital across the EAC region, as provided for by the Common Market Protocol", said EAC Deputy Secretary General Alloys Mutabingwa in a press release published by the African Press Organisation.

A total of six components make up the project - financial inclusion and strengthening market participants, harmonisation of financial laws and regulations, mutual recognition of supervisory agencies, integration of financial market infrastructure, development of a regional bond market and capacity building.

World Bank representative Mr McIntire said that the scheme will allow ordinary East Africans to trade on a single East African Stock Exchange. It will also contribute to the establishment of a single currency.