By: Nana Achiaa Aboagye
The Ghana International Trade and Finance Conference (GITFiC) says the creation of a single currency for Africa is essential to the successful implementation of the African Continental Free Trade Area – AfCFTA.
The theme for the conference, which took place in Senchi in the Asuogyaman District of the Eastern Region was: “Sovereign Economic Vulnerabilities; An Endorsement for a Single Currency for Africa”.
The stakeholders believe that the common currency, when implemented, will boost cross-border trade and economic development in Africa.
It is over a decade now, since the idea of having a common currency for countries in the Economic Community of West African States (ECOWAS) was first proposed.
The intention is to reduce barriers in doing business across the region and increase trade overall. The implementation of the new currency has been postponed due to factors such as hurdles in macroeconomic convergence across the countries.
The regional economic communities – RECs – in Africa, have been struggling with the creation of common currencies since the ideas were mooted. For ECOWAS, the struggle with implementation of the common currency started since 2003, when the Eco was scheduled to circulate.
There have been several postponements since then, the latest being from the set date of 2020 to 2027. Some observers think Nigeria, Africa’s largest economy, has dragged its feet making it difficult for the Eco to be launched.
The Director of Multilateral Surveillance Trade Department for the West African Monetary Institute, Mr. John Kotoku said having a single currency alone will not yield the desired results in promoting trade if systems are not put in place.
Mr. Kotoku said for the region to have a common currency it is important to have that synergy, macro convergence and policy harmonization that are required to mitigate transmission of asymmetric shocks. Adding that it is by this that they will be able to reach the benefit of having a single currency.
He said the eco currency is flexible but it is important that the building blocks are laid properly.
The immediate past Acting Director of Economic Development, Trade and Integration for the African Union, Dr. Dossina Yeo indicated that Africa needs some political commitment, and this is why President Akufo-Addo was appointed in 2019 to champion the creation of Africa Central Bank and other financial institutions to mitigate the hindrances for the creation of the Africa currency.
He said some countries are facing inflation rate, high debt issues which will continue to hinder the implementation of the single currency.
He reiterated the need to mitigate the risk to transform Africa economy.
He said many steps have been taken such as industrialization plan and the discussion that was held last year at the AU summit and Niger where leaders came out with key recommendations that will make Africa to develop to transform their sectors so they do not continue exporting our home materials.
He said “we must transform our local materials so the we can be able to trade among ourselves for the creation of the Africa currency.”
The Chief Executive of the Ghana International Trade & Finance Conference (GITFiC) Mr. Selasi Koffi Ackom was upbeat that the call for a single currency is inevitably saying it would happen at some point but the convergence criteria and the modality keep delaying the implementation.
He said as where they stand as an institution, the political will is almost zero saying until we get our political will we will still be dependent on the green back which will determine the strength of our economy.
The Ghana International Trade & Finance Conference (GITFiC) has done a lot of advocacies over the years on a single currency in Africa as an enabler of a safe and efficient financial environment.