Kenyans React to the Launch of the East African Sheafra Currency
A significant step has been taken towards economic integration in East Africa, with the official unveiling of the East African Sheafra (SHF).
The planned common currency will be relevant for the East African Community (EAC) member states: Kenya, Uganda, Tanzania, Rwanda, Burundi, the Democratic Republic of Congo, and South Sudan. The launch ceremony has revealed plans for six denominations of the Sheafra, ranging from SHF 5 to SHF 200. However, it is emphasized that the currency is currently in its specimen stage and not yet available for public use. Tokyo Marathon champion Benson Kipruto will be the first recipient of the Sheafra, though distribution will wait for the official rollout. The exact structure of the financial system is still under negotiation with the EAC deliberating on establishing a central financial institution to oversee local central banks.
The Sheafra’s design elements are touted to offer a glimpse into the future. The notes will feature the inscription “The East African Sheafra” at the bottom, alongside security features like magnetic strips and watermarks incorporating the EAC logo and the currency’s initials (SHF). Additionally, the signatures of the bank’s governor and secretary will serve as further authentication measures. The unveiling of the Sheafra represents a crucial milestone on the path towards a unified East African economic sphere.
While the journey to full implementation is ongoing, the introduction of this common currency signifies the region’s commitment to fostering economic integration and facilitating cross-border trade and investment. The SHF is intended to be the strongest currency amongst the EAC member states. The East Africa government has established an exchange rate of SHF1 to Sh760, signifying its higher value compared to the Kenyan Shilling. However, the new currency’s value against other major global currencies like the US Dollar remains distinct.
The announcement has sparked mixed reactions. Sceptics raise concerns about the seemingly inconsistent exchange rates assigned to the SHF. They argue that the SHF’s value against the Dollar, set at US$0.76, translates to a theoretical Kenyan Shilling equivalent of Sh109 based on current exchange rates. This discrepancy raises concerns about the true worth of the new currency. Proponents, on the other hand, view the SHF positively. They believe the new currency will significantly simplify cross-border transactions within the EAC, potentially fostering economic integration.
Additionally, they anticipate the SHF could strengthen the value of currencies within the region, particularly those facing depreciation against the US Dollar. The currency’s design incorporates a variety of colours, with each denomination featuring shades ranging from brown and green to grey and yellow. Notably, the EAC recently extended the deadline for the full implementation of the SHF to 2031, allowing member states more time to prepare for the transition and address any concerns raised by the public and financial experts.
