Africa Seeks a Single Currency
Globalization Marches on as Politicians Seek to Recreate Euro in Africa
The Abuja treaty, signed in 1991, created the African Economic Community as a part of the African Union. The African union consists of 53 member states, and was established on July 9, 2002. The treaty hoped to create the Afro by 2028, with a central African bank issuing the continent-wide currency. The African Union is currently working on establishing the central bank in Abuja, Nigeria.
Establishing a common currency would have the effect of uniting the continent of Africa, both economically and politically. The Afro would facilitate trade, lower the cost of conducting business on the continent, and reduce the confusion caused when multiple currencies are used.
Wycliffe Oparanya, the Minister of State for Planning, National Development and Vision 2030, said that establishing a single currency for Africa would require difficult political decisions to be made. A central African Government would be created that would regulate the entire continent's banking industry. The central bank of Africa would set the interest and currency exchange rates for the entire continent.
Africa has unique challenges when it comes to integrating the continent with a single currency. The European Union was able to integrate under the Euro, but it has significantly different economic conditions than Africa does. The European per capita GDP is $25,289, while Africa's per capita GDP was reported to be $2,975 in 2007. About 36% of Africa's population survives on under $1 a day. There are only 100,000 millionaires on the continent, compared to 2.6 million European millionaires, even though Africa's population is larger than Europe's. Zimbabwe's economy is currently affected by hyperinflation. Somalia is currently a collapsed state known for continued fighting and piracy.
The creation of a single African currency will probably be a challenging undertaking, but further discussions will bring the concept closer to reality during the government summit in July. If all the bugs can be worked out, a single currency might help stabilize the continent and increase prosperity in a nation that truly needs it. The development of this currency should interesting to watch.
Sources:
"African Union." Wikipedia. http://en.wikipedia.org/wiki/African_Union
"Economy of Africa." Wikipedia. http://en.wikipedia.org/wiki/Economy_of_Africa
"Economy of Europe." Wikipedia. http://en.wikipedia.org/wiki/Economy_of_Europe
Kimani, O'Brien. "Congress Pushes for Single African Currency." Kenya Broadcasting Corporation, March 2, 2009. http://www.kbc.co.ke/story.asp?ID=55904
Niyiragira, Yves. "Push for Single African Currency Begins." AU Monitor, March 2, 2009. http://www.pambazuka.org/aumonitor/comments/2226/
"Somalia." Wikipedia. http://en.wikipedia.org/wiki/Somalia
Published by Brooke Lorren
Brooke Lorren is a freelance content producer living in central Arizona; she has been writing for over 10 years and has created over 1000 articles, blog posts, and web sites. She has also helped her husband... View profile
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- Economic leaders met recently in Nairobi, Kenya to discuss creating a single African currency.
- Another summit is planned with the heads of state in July to make recommendations.
- The Afro would be the name of the currency and it would be regulated by a central bank.
4 Comments
Post a CommentBasically--The Continent of Africa has one of the largest known reserves--oil, diamonds, water, electricity, gold and silver. The currency will be dominating.
fascinating and an informative, well written article. Nicely done!
Single Currency is long overdue, less talking and more action please!!!
This is on the surface a great idea, as I do some business in Africa, but Central Banks are a relic, and as we will soon see in the United States and Europe, largely unable to regulate the economy anymore.