|See: Draft Bill on Single African Currency
Single Currency is the Answer To Funding Shortage
By Dan Kashagama
June 5, 2004
As with past Summits of the African Heads of State and Government, this year's Summit will have to confront the problems caused by lack of funding and underfunding of a multitude of programs and projects. Without adequate cash and other near-money instruments (eg., government bonds), Africa will continue to limp and struggle with unfulfilled expections in all spheres of life. International aid is no longer an option, and it is time for us to stop national begging.
The only option left to us is to make our economy work for us, and that means that Africa needs a single currency. This is no longer a matter of debate, it is an urgent requirement, and in my opinion it should be the first item on the agenda of the Summit, and of the African Parliament in its next session sometime this July.
AU Commission Chair Oumar Konare has said that we need $600 million to fund All-Union programs. State transfers are far less than this amount, and they struggle every year to fork out a measly $45 million. Yet Africa's GDP is enough to support transfers well over $600 million, if the African economy can be integrated a little more than it is today. Some estimates put the amount of funds that would be raised if the interstate trade restrictions were lifted, at over US$11 billion annually.
The best way to get $600 million at low cost right now is to literally print it. We can wrap around the printing process a bunch of hard-sounding economic rationalizations to satisfy economists and philosophers, but mark my words, until Africa has a single currency under the control of a centralized African institution that doesn't answer to foreign powers, we are going to beg and betray each other over scraps thrown at us by the EU and the IMF whenever we can satisfy their every whim and fancy.
And the technical analyses on the advantages of a Single African Currency are positive. There is no need to wring our hands and worry that there is something apocalyptic that will happen to Africa if we have a single currency. What could possibly go wrong that has not happened yet?
You have to wonder about the reports that are discouraging African leaders from taking the one step that will begin to fix our problems. They are misled by propaganda from racists who want to keep Africa down. A single currency will be easier to manage than the 50 odd currencies that are barely worth the paper they are printed on.
It is time for a single African currency, and it is an easy thing to do. So let us get on with it. The PAP should pass a resolution giving a charter to print money to a new African Currency Board. The board should print about 3 trillion units, and issue about 30% of the units for immediate use by the public, and release the rest of the money in response to economic initiatives designed to maintain the currency at an internationally competitive exchange rate.
Moreover, the PAP should also mandate the creation of reserve funds and a revenue authority to tax and fund public projects, and to restructure Africa's economy and banking system. This is the way forward. Eventually the Union will have to tax dirty industry and help Africa pay for a healthy and sustainable Green Economy. Perhaps it would be smart to start with a Tobin Tax on international currency transactions (to protect the single African currency from unfair speculation) and show the world that we can lead the way forward. But it all starts with having our own single currency.