Globalization Marches on as Politicians Seek to Recreate Euro in Africa
In a recent meeting of the African Union in Nairobi, Kenya, African
economists put their heads together in an attempt to create a single African
currency, similar to that of the Euro in Europe. This group will continue to
work on the proposal over the next few months, and will be making
recommendations to the various heads of state during a summit this July.
The Abuja treaty, signed in 1991, created the African Economic Community as
a part of the African Union. The African union consists of 53 member states,
and was established on July 9, 2002. The treaty hoped to create the Afro by
2028, with a central African bank issuing the continent-wide currency. The
African Union is currently working on establishing the central bank in
Abuja, Nigeria.
Establishing a common currency would have the effect of uniting the
continent of Africa, both economically and politically. The Afro would
facilitate trade, lower the cost of conducting business on the continent,
and reduce the confusion caused when multiple currencies are used.
Wycliffe Oparanya, the Minister of State for Planning, National Development
and Vision 2030, said that establishing a single currency for Africa would
require difficult political decisions to be made. A central African
Government would be created that would regulate the entire continent's
banking industry. The central bank of Africa would set the interest and
currency exchange rates for the entire continent.
Africa has unique challenges when it comes to integrating the continent with
a single currency. The European Union was able to integrate under the Euro,
but it has significantly different economic conditions than Africa does. The
European per capita GDP is $25,289, while Africa's per capita GDP was
reported to be $2,975 in 2007. About 36% of Africa's population survives on
under $1 a day. There are only 100,000 millionaires on the continent,
compared to 2.6 million European millionaires, even though Africa's
population is larger than Europe's. Zimbabwe's economy is currently affected
by hyperinflation. Somalia is currently a collapsed state known for
continued fighting and piracy.
The creation of a single African currency will probably be a challenging
undertaking, but further discussions will bring the concept closer to
reality during the government summit in July. If all the bugs can be worked
out, a single currency might help stabilize the continent and increase
prosperity in a nation that truly needs it. The development of this currency
should interesting to watch.
Sources:
"African Union." Wikipedia. African Union - Wikipedia, the free encyclopedia
"Economy of Africa." Wikipedia.
Economy of Africa - Wikipedia, the free encyclopedia
"Economy of Europe." Wikipedia.
Economy of Europe - Wikipedia, the free encyclopedia
Kimani, O'Brien. "Congress Pushes for Single African Currency." Kenya
Broadcasting Corporation, March 2, 2009.
Kenya Broadcasting Corporation:
Niyiragira, Yves. "Push for Single African Currency Begins." AU Monitor,
March 2, 2009. AUMONITOR | Push for Single Africa Currency Begins
"Somalia." Wikipedia. Somalia - Wikipedia, the free encyclopedia
In a recent meeting of the African Union in Nairobi, Kenya, African
economists put their heads together in an attempt to create a single African
currency, similar to that of the Euro in Europe. This group will continue to
work on the proposal over the next few months, and will be making
recommendations to the various heads of state during a summit this July.
The Abuja treaty, signed in 1991, created the African Economic Community as
a part of the African Union. The African union consists of 53 member states,
and was established on July 9, 2002. The treaty hoped to create the Afro by
2028, with a central African bank issuing the continent-wide currency. The
African Union is currently working on establishing the central bank in
Abuja, Nigeria.
Establishing a common currency would have the effect of uniting the
continent of Africa, both economically and politically. The Afro would
facilitate trade, lower the cost of conducting business on the continent,
and reduce the confusion caused when multiple currencies are used.
Wycliffe Oparanya, the Minister of State for Planning, National Development
and Vision 2030, said that establishing a single currency for Africa would
require difficult political decisions to be made. A central African
Government would be created that would regulate the entire continent's
banking industry. The central bank of Africa would set the interest and
currency exchange rates for the entire continent.
Africa has unique challenges when it comes to integrating the continent with
a single currency. The European Union was able to integrate under the Euro,
but it has significantly different economic conditions than Africa does. The
European per capita GDP is $25,289, while Africa's per capita GDP was
reported to be $2,975 in 2007. About 36% of Africa's population survives on
under $1 a day. There are only 100,000 millionaires on the continent,
compared to 2.6 million European millionaires, even though Africa's
population is larger than Europe's. Zimbabwe's economy is currently affected
by hyperinflation. Somalia is currently a collapsed state known for
continued fighting and piracy.
The creation of a single African currency will probably be a challenging
undertaking, but further discussions will bring the concept closer to
reality during the government summit in July. If all the bugs can be worked
out, a single currency might help stabilize the continent and increase
prosperity in a nation that truly needs it. The development of this currency
should interesting to watch.
Sources:
"African Union." Wikipedia. African Union - Wikipedia, the free encyclopedia
"Economy of Africa." Wikipedia.
Economy of Africa - Wikipedia, the free encyclopedia
"Economy of Europe." Wikipedia.
Economy of Europe - Wikipedia, the free encyclopedia
Kimani, O'Brien. "Congress Pushes for Single African Currency." Kenya
Broadcasting Corporation, March 2, 2009.
Kenya Broadcasting Corporation:
Niyiragira, Yves. "Push for Single African Currency Begins." AU Monitor,
March 2, 2009. AUMONITOR | Push for Single Africa Currency Begins
"Somalia." Wikipedia. Somalia - Wikipedia, the free encyclopedia
