Friday, March 5, 2010



By Jerry Okungu
Nairobi, Kenya
March 2, 2010

As the talks on the East African Common Currency gain momentum in Dar es Salaam, let me take you down memory lane on this subject.

One evening in August in 1966 as a school kid, my parents shipped me off on a boat to sail across Lake Victoria from my home town, Kisumu to the other side of the lake in Tanzania. My destination was the port of Musoma from where I would use multiple means of transport to get to Sanaki where many of my migrant relatives lived.

In those days, travelling across our borders was no big deal. There was no need for travel documents as we still enjoyed the luxuries of the East African Common Services, the precursor to the 1967 East African Community. In those days, there were no matatus or recklessly driven and overloaded buses. The only means of transport were the East African Railways, steamers and OTC buses.

I can remember clearly that it was the month of August when schools were closed. I had accomplished the same feat alone four months earlier when the same parents put me on an OTC bus, to travel to Kampala to visit one of my first cousins who was a bicycle repairer near Nsambya Police Station.

As a young boy growing up in Kenya, travelling was my undying passion. I loved to travel and discover far distant places in order to come and tell my school mates tales of my adventures.

In those days, the East African Shilling was the only money we all knew in the region. It was the same shilling found in Kenya, Uganda and Tanzania. And it was a pretty strong currency. At times the East African Pound was stronger than the British Pound by at least 25% in value. That was why the fare to Kampala from Kisumu was KSh 3.00 by bus while traveling from Kisumu to Musoma cost KSh 4.00 for an overnight boat ride that took 14 hours.

In those good old days, there was no need to worry about the US Dollar or the British Pound as the currency of choice for our regional travel. There was no Euro either because the European Union had not come into being. Life was fun those days. Kenyans, Ugandans and Tanzanians felt more East African than they do today. Many things made us feel that way. We had the East African Airways, the East African Railways and Harbours, the East African Posts and Telecommunications, The East African Power and Lighting Company, the East African School of Aviation at Soroti in Uganda, the University of East Africa in Makerere, the East African Marine Services, the East African Examination Council and even the East African Tea Research Institute among many other East African organs. We even had East African Driving licenses recognized throughout the region.

Because we had a common currency, travelling across the three states was much cheaper because we didn’t have to lose our cash at exchange bureaus like we do today.

However, with the advent of the 1967 East African Community, so many things began to change. The three states decided to go their separate ways with their own currencies. These were political decisions taken by political leaders without consulting their citizens.

Overnight, we were confronted with the puzzle of converting the East African Shilling to our national currencies. Nostalgia notwithstanding, the transition took place and the region came to terms with it.

For the next couple of years or so, the three currencies could be used interchangeably in any of the three territories. However, even this scenario came to an abrupt end when Idi Amin overthrew Milton Obote in 1971 subsequently plunging Uganda into turmoil and economic meltdown. In just a few months of his rule, the once vibrant Ugandan economy was on its knees.

Sooner rather than later, Kenyan businessmen could no longer accept the weakened Ugandan currency even as Ugandans fleeing their troubled land clamored for the Kenyan shilling.

As the Tanzanian economy also faltered under Nyerere’s Ujamaism, it was increasingly becoming evident that the Kenyan currency was in demand in the whole region while the reverse was the case with the other two. And even after the stabilization of the two economies decades later, the exchange rate has never been the same again.

This distortion is the reason we East African neighbors still carry European and American currencies as we travel to do business next door. This is an arrangement that is not only shameful but degrading and expensive. Today, if I travel from Nairobi to Dar es Salaam and Kampala, I will change my currency three times before I return to Nairobi. Every time I change my money either into a local currency or a dollar, I lose some of it due to fluctuations that happen every day.

The day the five states will agree to have a common currency, travel will be substantially cheaper and affordable in our region. It will be a step closer to full regional integration.