First Congress of African Economists, Theme - Single African Currency

by Mkhululi Ncube — last modified 2009-07-19 13:32

"Towards the creation of a single African currency"

First Congress of African Economists, Theme - Single African Currency

The 'AFRO' is the proposed name for the single currency

The African Union (AU), organised the workshop whose recommendations will be presented to a heads of states and governments in July 2009.

According to the AU commissioner for economic affairs, the process of establishing a common currency was part of the Abuja Treaty aimed at uniting the continent both economically and politically.

Signed in 1991, the Abuja Treaty consented to establishing the African Economic Community under the larger umbrella of the AU. Among the other areas that the treaty sought to create, include the African Central Bank, African Investment Bank and an African Monetary Fund.

At inception, the treaty proposed the name Afro for the single currency. The treaty also proposed the enactment of the Afro by 2028 with the African Central Bank being the sole issuer of the currency.

Work is already underway on the steps to establish the bank in Abuja, Nigeria. The discussions are being held with the Nigerian authorities to sign a memorandum of understanding for hosting a technical steering committee to undertake implementation of the bank.

Other mandates of the bank would be to become the banker of the African Government, Africa’s private and public banking institutions as well as to regulate and supervise the African banking industry. It would also set the official interest and exchange rates in conjunction with the African Government’s administration

The search for a single currency for the continent also comes at a time when most economic blocks are pursuing the same front at different levels. This has been underscored by the level of ease in trading when countries subscribe to a single currency. This has also been attributed to taming issues of price distortions where multiple currencies are involved.

In as much as the continent may be eager to adopt the single currency, the modalities of doing so may provide real challenges to the AU and the continent as a whole.

Assessing Regional Integration In Africa (ARIA)- Towards Monetary and Financial Integration In Africa: ARIA III

ARIA 3 : Towards Financial And Monetary Integration ARIA-III , the African Union - UNECA joint publication, is the third of the ARIA series and focuses on the theme of macroeconomic policy convergence, monetary and financial integration in Africa’s Regional Economic Communities.