Single currency for Africa: the case for economic unity.
The problem with all these regional economic communities and monetary zones is the disproportionate strengths of the various member states. Just as Ecowas, and in fact the West Africa region as a whole, is dominated by Nigeria's huge economy, so is Comesa's by that of Egypt. My own region is SADC and even though the SADC headquarters is based in my home town of Gaborone, it is South Africa's giant economy that completely overshadows this economic community.
South Africa's economy vastly outweighs even the sum total of its fellow member states. The total GDP of the SADC region is somewhere short of $300bn--and South Africa accounts for some $265bn of that.
So, while I am no banker, in my opinion the only way that a monetary union can be achieved is for each regional economic community to align itself with the currency of its strongest member--so Ecowas would adopt the Nigerian naira, Comesa the Egyptian pound and SADC the South African rand (while Francophone countries retain the French franc zone system). That would mean that some of the anomalies of the make-up of the current communities would need to be adjusted (for instance, just why is Swaziland a member of Comesa?) and it would probably take at least 50 years to take shape, but it might just happen.
Then, and only then, would sub-Saharan Africa have a chance of merging those four currency systems into a single currency--but if all countries insist in retaining their own money, I really see very little prospect of success.
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|Title Annotation:||THIS MONTH'S PRIZE LETTER|
|Article Type:||Letter to the editor|
|Date:||Jul 1, 2006|
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