says 90% of African central bank governors don’t believe it
Africa’s dream of having a common currency might be far from becoming a reality. There are attempts by the regional blocs in Africa to have a common currency.
In ECOWAS for instance, the region is still struggling to have the common currency known as the ECO. There have been the convergence criteria which ECOWAS countries must meet.
The African Union (AU) is also pushing the agenda of having a single continental currency.
But according to Nigeria’s central bank governor, Sanusi Lamido Sanusi, majority of the central bank governors in Africa do not believe in the single currency idea.
“90% of central bank governors in Africa don’t believe in the need of having a common currency,” Mr Sanusi said during a panel discussion at the ongoing 6th AU-ECA Joint Meeting in Abidjan, Ivory Coast.
Even though the AU and African Heads of State want a common currency, Mr Sanusi said “the reality is that you cannot talk about a common currency at a transaction cost when you have not integrated your economies.”
He added, “trade in Africa is just 10% of international trade…so what transaction cost are we saving by going into the single currency.”
The 2011 Forbes Africa Person of the Year called for more intra-African before having the currency, citing Europe and South East Asia as examples.
“At the point that the euro came into being, trade among European countries was 65%. South East Asians have been trading among themselves between 35% to 40% and even they are not talking about a common currency,” Sanusi said.
He said, “The idea that the Europeans have the euro, therefore Africa needs a common currency, we should get out of it…it is rubbish.”
Sanusi urged that Africa must build the infrastructure, have free movement of goods and services, and increase the level of trade in Africa before “we start talking about a common currency”.
By Ekow Quandzie in Abidjan, Ivory Coast