|TIME TO END MONETARY COLONIALISM
WHY AFRICA NEEDS ITS OWN CURRENCY
Does Africa need a common currency? The answer is Yes. The AU needs a currency of its own for many solid economic reasons, but more importantly, for political and cultural reasons. But, one wonders if an African currency makes sense in the era of electronic banking when national moneys appear to become redundant as millions of people, irrespective of their country of domicile, get access to competing financial institutions in a variety of competing currencies. In a time when national money monopolies are being made obsolete why should Africans worry about having their own money?
We need an African currency because economic injustices in the world are due in part to incoherence in global currency arrangements. Having your own currency as a shield under which to manage some, if not most, of your economy is a wise course to follow under the circumstances. From a political point of view however, to not have an African currency is a deadly error with dramatic consequences for the viability of our nation. The value of money is more than as a medium of exchange, but it is a form of cultural expression, and also a means of social organization and a symbol of national identity. Even the invisible electronic credits, as they make cash money less vital, are also based on a tangible social order. Solid currencies will always be a means to organize an orderly society (even when the money is only for symbolic purposes and can’t get you a plate of beans).
The global currency trade is volatile and is not properly based on "fundamentals" like the relative strengths of the various economies. So in spite of the fact that Africa has a higher base economic value than the US (by at least 400%), the global exchange rate based on fiction and not on equal pay for equal labor, is such that General Electric is probably more “valuable” than the entire worth of all the firms in Africa. All of the so-called development programs in Africa can only change this imbalance marginally. So creating skilled workers or producing more crops for export will still never come near to fixing exchange rate problem.
Short of abolishing the currency exchange rates, the only other thing that works is economic reform…but not the WTO/IMF/EDF type. The African Union’s problem is not only in the exchange rate, but also in the lack of reforms to establish solid fundamentals for economic stability and growth – reforms whose focus must be to move away from dependency on European markets for our primary products - and away from their supplies for secondary products, and some fiscal balance (no spending what we don’t have). In the absence of a divorce from the neocolonial terms of trade, the future of economic and monetary reforms in Africa is bleak.
Post WW2 Europe and Japan worked because there was a political decision in America to “let them in” on equal terms. That is not going to happen for Africa, unless some smart person takes over the American government and the EU and orders a currency intervention, devalues the G7 currencies, lowers international tariffs, removes unfair subsidies, simplifies the paper work for patents and the movement of goods across the borders, and just plain changes the rules.