One African Currency

African currencies are hardly considered significant when it comes to forex trading and global markets, but with a single currency being proposed by the African Union for implementation in 2023, it’s worth speculating about what it could mean for the continent.

The hypothetical names being proposed are the Afro and the Afriq. Interestingly, the suggestion of a single currency, though rejected as impractical at the time of suggestion, was originally made by Muammar Gaddafi. The unpopular warmonger also wanted a single military force and passport system, but his monetary idea obviously planted a seed that’s been steadily growing.

The African Economic Community, a branch of the African Union, has been set to establish communication between African states regarding the implementation of one currency. Formed in 1994, the group has set phased goals into place which, if all goes according to plan, should result in a single currency continent by 2028 at the latest.   

Reactions have been varied. So far only three of the 53 states which hold membership within the African Union have committed to the idea. Delays have been requested by Egypt, Swaziland and Lesotho as they have openly stated their reservations about the change over, while the Seychelles and Cape Verde have shown interest in joining the euro instead. Two countries which have blatantly stated no interest in joining a currency union are Ethiopia and Morocco, while the rest of the African states are still open to change.

If the strategy is implemented, Africa’s presence on the global market will surely be increased. Smaller economies will benefit from the protection provided by larger, more stable ones, making it less possible for outside influences to take advantage. It could also encourage better inter-continental relations, improve local trade and act as a catalyst to ease tensions. A united Africa may also be able to curb the extent of the exploitation on its natural resources. We currently get far too little for way too much – though I may be dreaming too big to think this will ever change.

On the downside, the diverse political and economical landscape in Africa may prove too daunting for this ambitious idea, and our lack of infrastructure is likely to stunt inter-trade instead of help it flourish – but these are all obstacles that can, with time, effort and the right governance, be overcome.

Perhaps I’m being too positive, though. While it may seem inconceivable for Africa to follow in the footsteps of Europe when it comes to a new monetary system, there’s no reason why we shouldn’t try.   

Warren King is an experienced content writer who enjoys writing about finance and currencies, topics like the metatrader 4 and the mt4 demo account interest him the most.

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