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10.02.2009 Feature Article

One common African currency (The Afric)

One common African currency (The Afric)

How the World Bank/IMF can help
The continental connections between the past and present were defined by Gamel Nasser, Ben Bella, Nnamdi Azikiwe, Kwame Nkrumah, Haile Selassie, Jomo Kenyatta, Patrice Lumumba, Nelson Mandela, and the others, for an African unity.

The true economic compass for Africa resides in the vision of the men who led the freedom struggles. Never in Africa's history was so much owed to so few by so many. Even in death, providence smiled on Africa's favourite sons.

In all, the feeble, solo efforts in their respective struggles for freedom, confirmed the imperative for one continental force, one voice, one economy, one money. Though today's challenges may contain new factors, the essentials are not that different. In thinking into the future, the commitments of the mavericks were relevant for that time as it continues to be for today.

The challenge was to make the lives and souls of the pioneers not soft padding for hypocritical posturing at AU meetings, but vehicles to continue what was in Africa's best interests.

The batons, relayed to our generation, were retrieved in blood, sweat, and tears. The purpose is to spur into action, for a common cause, all the latent strengths of the various African states.

The core interests in eliminating poverty in Africa remained imperative. That continental cause could put all Africa in a splendid, new light. Going it alone was like using pebbles for sea defenses.

History has fascinating but strange and expensive ways of revealing itself. The pioneers had a vision of Africa's resources harnessed optimally in Africa's interest. The imperative was for an African Union: the larger economic benefits, continental resolutions and defence, one respectable voice in international affairs, as we see in practice in China and India today.

The vast changes taking place in the world are of immense concern. While Africa's leaders continued to debate and scatter endless positions in thought, others have reached certain positions in fact. If China could manage and feed 1.3 billion citizens, and India over a billion, couldn't Africa do the same for a smaller population? Could a balkanised, disorganized, aloof, flighty China or India be so influential in so short a time?

India, for one, presented an impressive model. Delineated by caste, feudalism, untouchables, umpteen religions, numerous linguistic blocks, and hundreds of independent principalities - India was never one nation. “That it has survived as the world's biggest democracy and is now emerging, with over a billion people, as an economic giant, is one of the remarkable tales of modern times,” said the Economist.

To begin with, Africa paid a stiff price for not trading internally among the neighbours. It was estimated that only a meager 4% or so of Africa's trade was with one another. And who could possibly trade and enhance good sociability amid a guzzling, puzzling, frustrating, tribal array of currencies: ekuelas, lilangenis, ouguiyas, dinars, dirhams, dalasis, nairas, cedis, francs, rafkas, birrs, kwazas, shillings, zaires, rands, pulas, dobras, leones, escodos, pounds?

It's beyond a big joke; it's abnormal! The sheer multiplicity of currency set-ups, printing costs and commissions alone were self-destructive wastes. Naturally such insidious expenses were hugged as secrets; but the wanton behaviours inadvertently supported the very same inequities the founders fought to eliminate.

Worse, the erratic monetary divisions invited chaos, exchange difficulties, transaction costs, banking stalemates, suspicions, cunning middlemen, inflated prices, and a posse of hassles which no good government or global partners should want.

Scrutinizing and selecting safe nations, what honest “strategic” investor, small or big, will take such states seriously? So uncoordinated, sporadic, temperamental, amorphous, and haphazard, Africa's currencies have gone way past the point of puerility. By not getting our acts together, Africa got poorer by the day, and as usual - like the survival of the fittest - women and children suffered the most.

The bigger balkans (the regionalists) were equally tiresome: ECOWAS, AMU, CEMAC, ECCAS, SADC, COMESA, EAC, ICAD, CEN-SAD: how long had they not been bandied about? And when will the anticipated relishes come in deeds? But the groupings – properly aligned and defined - could be quite useful as regional subsidiaries of one African Central Bank (ACB), with focus on one wholesome, convertible currency, the “Afric”.

Every strong central bank supported a strong currency. All of China has one main currency – the Yuan; India – the Rupee; America – the mighty Dollar; continental Europe – the Euro. The best examples and practices are no secrets.

Why the heaps of World Bank/IMF analyses and Africa advisory reports, over the years, skipped such blatant essentials was a legitimate question. Maya Angelou (the Pan-African, poet laureate) put it bluntly: If you were not part of the solution, you were part of the problem.

In lieu of the usual Africa-South-of-the-Sahara doomsayers' reports and serial ad-hoc moves, future World Bank/IMF reports should be pro-active. The point is to quit the gloom, and not live inside it.

Perhaps that was what the World Bank Group President, Mr Robert Zoellick, meant in his address to the 12th Ordinary Session of the AU at Addis Ababa (Feb 2009) when he said he was “here personally, to listen and learn from you about your concerns, and how the World Bank Group can be a better partner. We want to build with you.”

For starters, the World Bank/IMF should subsequently help implement a most relevant aspect of the 2004-2007 African Union Plan of Action, Priority Programme 16: “Towards a Common Currency” prepared by the Commission of the African Union, in May 2004.

[The Constitutive Act of the AU, Article 19, The Financial Institutions, defined The African Central Bank (ACB), and was adopted at Lome, Togo, 11th July, 2000].

A common currency will enhance the vision and purpose of the founders and forge much closer economic links in Africa. The important thing is to support continental trade and markets, and elevate the standards of living of as many people as possible, and quickly, so that the appeal to leave one's domicile is not that profound. [Opening up all borders indiscriminately, for one, will create an instant avalanche of migration and confusion the scale of which the host states cannot stem].

The World Bank Group must use their expertise to help with the critical task of the setting up partnering structures to link up all the currencies on the continent. The object is to develop meaningful indices that establish parities with the main purpose of tying the various currencies into one comprehensive unit, the “Afric”.

Fast-track currency integration will soon create a common pool of international reserves, convertibility, financial stability, trust, and multiplying effects throughout the continent. When the “Afric” prospered so will the World Bank Group itself be honoured and elevated as bona fide partners. The Dollar, Euro, Yuan, and Rupee presently enjoy huge economic benefits for their respective regions, and why not Africa?

In his article “Time to herald the Age of Responsibility” (The Financial Times, 29 January 2009) Mr Zoellick asked appropriately: “How will the first half of this century be defined?” He recommended that “sustainability take precedence over the enrichment of a few. That means a focus on creating growth that includes opportunities for the poor … microfinance and lending to small entrepreneurs,” and so on. Mr Zoellick could be on the verge of history.

This is an opportunity for Africa to work with Mr Zoellick for a continental currency. He means well. Of course, it was preferable that Africans themselves lead in this noble cause. But where leadership tends to thrive in self-grandeur when will the continent itself progress? What miracles do we ever foresee in Africa without bold economic measures? The worse pity was that the next generation, if not guided, might continue the very same rackets in lieu of pursuing Africa's best interests.

Americans are good role models: They are great at supporting their own geniuses to set up useful systems so that any average person could scale the top and gain from that vantage point. But, in Africa, the meaningful, disciplinary structures that would benefit the AU and hence all Africans were the exact same things that some leaders ganged up against, and stonewalled. What should have been “a slam dunk”, considering such clear examples of visionary paths for Africa's future, was consistently deflected.

Africa's monetary seizures - caused by the proliferation of cheap currencies - prostrate the economic progress of the continent. Civil and religious societies should add their voices. The structural inequities continued to breed lifelong poverty at the bottom.

In the meantime, the richer nations wove superiorities in monetary controls, finance, management, and production into competitive advantages, and would not look back. Having measured monetary efficiencies, on a cumulative scale, in all aspects of finance, trade and industry, they carried into profitable execution carefully prepared plans of action. That was the story behind Africa's diminishing 2% of world trade. Donor aids and feel-good millennium bonanzas smack of short term benefits only; in the long haul, they were trifles compared with the potentials lost to this gigantic, resourceful continent.

Doomsayers boasted how cruel fortune was to Africa, and other fallacies which the local political chiefs yielded too quickly to. The World Bank Group should desist from using valuable resources to focus unduly on the negatives. With Mr Zoellick at the helm we should see a renaissance, with the unveiling of Africa's very own currency, the “Afric”.

Poverty is a scary, tricky thing, but can be eliminated: And, governance or international trade need not be zero-sum games; the quantum can be greater than the sum of its parts. Wealth can be created, especially when resources are managed and allocated productively for the general good. In the end, Never in Africa's history was so much owed to so few by so many. Africa's prosperity will ripple through the entire globe. We live to see a brighter day.

Credit: Anis Haffar's [email: [email protected]
Website: www.gate.ghanaschoolsonline.com]

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