THEME: MONETARY POLICY: THE UNIFICATION OF AFRICAN CURRENCIES
BACKGROUND
The current state of the monetary policy in Africa varies greatly from country to country as there are different regulations and policies each country has adopted to guide them in this aspect. When we hear about discussions on monetary policy especially in Africa, what does this mean? Monetary Policy is a set of actions taken by a country’s central bank to manage the money supply and interest rates. It’s a demand-side economic policy that helps governments achieve macroeconomic goals like inflation, consumption, growth, employment and liquidity. In June 3rd 1991 in Abuja, Nigeria, an international agreement was signed known as the “Abuja Treaty” which saw to the creation of the African Economic Community (AEC), entered into force on May 12 1994 and called for the development of the African Central Bank to follow by 2028. As of 2019, the plan was to establish an African Economic Community with a single currency by 2023. The vision behind these is to boost trade and economic cooperation, such as a common currency, single market, free trade areas, custom unions and a central bank; which will increase growth and development among African union member states. However, this proposed monetary unification is already facing some economic and political issues and not all African countries will be able to meet the requirements needed for this prior to its launching.
The African Union (AU) has four financial institutions of which the African Central bank (ACB) is among. The African Central Bank has been set up to build a common monetary policy and single African currency as a way to accelerate economic integration. According to the AU, it will be fully established between 2028 and 2034. While preparations are underway, the African Central Bank set up an African Monetary Union (AMU) that will see to the economic and monetary unions of member states as well as the single currency hypothetically called “Afro” or “Afriq”. This body will also see that the proposed single currency will consist of currency units made up of regional union reserve bank currency units of which are made up of country specific currencies. With all these plans and projections by AU in partnership with different heads of states and stakeholders, it seems that the vision keeps delaying its materialization. And of course, we know that achieving the unification of currencies is very pertinent and very key to our collective growth and development. The matters we need to urgently address is how do we navigate the challenges both locally and internationally in order to have the Africa we desire by year 2063. World Bank 2018 report showed some of the challenges facing single currency adoption, here are some of the challenges:
- Diverse Economies: African countries have diverse economies with varying levels of development, industrialization, and economic stability. Harmonizing these economies to adopt a single currency could be challenging, as it requires aligning fiscal and monetary policies.
- Macroeconomic Convergence: Before implementing a common currency, there needs to be a convergence of macroeconomic indicators, such as inflation rates, fiscal deficits, and debt levels.
Achieving this convergence among countries with different economic structures and policies can be complex.
- Political Will and Coordination: Unifying currencies requires strong political will and effective coordination among participating countries. Political differences, competing national interests, and concerns about losing control over monetary policy may impede progress.
- Institutional Capacity: Establishing the necessary institutions to manage and regulate a unified currency, such as a central bank and regulatory bodies, requires significant institutional capacity. Some African countries may need to strengthen their financial institutions and regulatory frameworks.
- Currency Stability: Ensuring the stability of the unified currency is crucial to gaining public and investor confidence. Concerns about exchange rate volatility, inflation, and economic shocks may pose significant challenges.
- Public Perception and Acceptance: The success of a common currency depends on the acceptance and support of the public. If citizens perceive that their economic interests are not adequately protected or if there is a lack of trust in the new currency, implementation may face resistance.
- Harmonization of Legal and Regulatory Frameworks: Aligning legal and regulatory frameworks across multiple countries is a complex task. This includes issues related to banking regulations, financial reporting standards, and legal frameworks for contracts and transactions.
- External Influences: External factors, such as global economic conditions, commodity prices, and international financial markets, can impact the success of a unified currency. African countries may be vulnerable to external shocks that could affect the stability of the currency.
- Infrastructure Challenges: In some regions, there may be infrastructure challenges, including those related to telecommunications, transportation, and financial infrastructure. Addressing these issues is essential for the effective functioning of a unified currency.
Apart from the aforementioned issues, there is still one major problem that has subtly and indirectly infiltrated our economies which is no other than the rise of neo-colonialism amongst former colonial nations in our continent. This has manifested through economic dominance, cultural influence, political interference, etc. While the concept of neo
colonialism is complex and has taken various forms, this is one of the critical challenges to our sovereignty and self-determination as a continent. For example, many French-speaking African countries that are part of the Economic Community of West African States (ECOWAS) and the Central African Economic and Monetary Community (CEMAC) use currencies that are linked to the Euro through a fixed exchange rate. These currencies are guaranteed by the French Treasury (West African CFA franc (XOF) and Central African CFA franc (XAF)]. Mentioned below are some of the negative and harsh impacts of neo-colonialism.
- Economic Dependency: Some African countries may still be economically dependent on former colonial powers, either through trade relationships, foreign aid, or investment. This dependency can limit the ability of these countries to make independent economic decisions.
- Debt Dependency: African countries face numerous challenges related to debt, with debts owed to former colonial powers or international financial institutions. The terms of these debts and the conditions attached to loans influences the economic policies of debtor nations. For instance, in 2022, public debt in Africa reached USD 1.8 trillion. While this is a fraction of the overall outstanding debt of developing countries, Africa’s debt has increased by 183% since 2010, a rate roughly four times higher than its growth rate of GDP in dollar terms, according to an article published in April 2023 by United Nations Conference on Trade and Development.
Data from the World Bank shows that 49 African countries owe 39% of their debt to multilateral institutions, 35% to private creditors (excluding Chinese private creditors), and 12% of the debt burden on the continent is owed to China and Chinese lenders. In 2021, private lenders charged 5% interest rates while China and multilateral lenders charged 2.7% and 1.3%, respectively. This spread of creditors makes it hard to navigate issues of debt restriction. Hence, African countries looking to discuss easing the debt burden face the uphill task of coordinating creditors with varying interests and willingness to cooperate. Creditors are often unwilling to restructure debt if they believe it will serve the interests of other creditors.
Dr. Akinwumi A. Adesina, the President, African Development Bank Group, in his address at the Paris Club on June 20, 2023 also mentioned that an increasing percentage of debt owed by African nations is now in the form of resource-backed loans. Between 2004 and 2018 30 natural resource-backed loans worth $66 billion were signed by African countries. Most of the loans were backed by oil, minerals, and commodities. The commodity price crash of 2014 threw to 10 out of the 14 countries that used natural resource backed loans into serious debt problems.
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- International Economic Structures: The global economic structures and institutions, which are often influenced by powerful nations, impact
the economic policies of African countries. These structures may not always be conducive to the interests of African nations.
- Cultural Influence: Cultural influence from former colonial powers can shape societal norms, values, and preferences. This influence may extend to economic practices and policies, impacting decisions related to currency unification.
- Political Interference: Former colonial powers might exert influence over the political affairs of African nations, either directly or indirectly. This affects our decision-making processes, including those related to economic policies and currency unification. These are some of the pertinent issues contributing to the difficulties we are facing in having one monetary policy in Africa.
Having identified the root causes of our problems and obstacles, African leaders and relevant stakeholders need to take a pragmatic and strategic approach in addressing these issues collectively and nationally, especially on repaying our debts as a continent and addressing other issues so that by year 2063 we will have the African of our dreams that future generations will be very proud off. This is the major reason why we are putting together this year’s conference to find lasting and systemic solutions for our growth and development, of which having a single currency will enable us to achieve that.
CONFERENCE GOALS FOR 2024
The conference is our opportunity to start a global conversation about the monetary policy and unification of our currencies in Africa, based on the following:
OUR OBJECTIVES:
- Identify problems and challenges plaguing unification of African currencies, which is hampering our ability to foster trade and economic growth and development in our continent and how to solve them.
- Leveraging our regional experiences and expertise with a view to developing a singular framework upon which we can solve our monetary policies issues in Africa.
- We want to position Africa as a continent with transformed economies and an Africa that takes full responsibility for financing her developmental goals.
OUR APPROACH:
Have a round table engagement forum where experts from northern, southern, Eastern, Western, central Africa and Diaspora share their peculiar problems and sustainable solutions to these challenges.
At the end of the FORA, The African Government Stakeholders Engagement Forum will be tasked with compilation as a white paper of real time solutions presentable to governments and necessary stakeholders to help us make adjustments and achieve exponential
results in Agriculture across the different areas of growth.This is a two day hybrid event with day two being held at Addis Ababa, from the 20th to the 21st of September 2024. It will include 5,000 attendees, 30 high profile speakers, news and media coverage globally of up to 1,000,000 people and we guarantee excellent virtual execution. At the end of this summit, we are expected to have a white paper interpreted in all African Languages that will be submitted to African Union headquarters, Heads of states and Presidents which will eventually be passed as a bill for onward implementation in their respective countries. We will also introduce and attach Youth Ambassadors that will help with implementation of the white paper for the Africa we want.
2024 Mission
Values are our bedrock
OUR FOCUS IS SUSTAINABLE CHANGE AND IMPACT, NOT ONE TIME SUCCESSES.
Mission
To create a sustainable monetary policy framework for the Africa we want by leveraging skills, technology and collaborations.
Vision
To be the leading strategic and implementation partner with the different stakeholders in Africa both private, public and government to deliver the Africa we want by the unification of our currencies to boost trade, growth and development among member states.
Organizing Teams
- Organizing Chair: Just Ibe
- Organizing Vice- Chair: Edith Njage
https://www.linkedin.com/in/edith-wangare-njage/ - Chief of Finance & Partnership: Adaobi Ossai
www.linkedin.com/in/adaobi-whitney-ossai-7059aa71 - Chief of Implementation: Feruz Semere
https://www.linkedin.com/in/feruz-semere/ - Project Manager: Nana Nwandu
- Executive Assitant: Modupe Adeyemi
- Jamila Idris

Conference In Numbers
Partnership Opportunities
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Partnership
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OUR METHODOLOGY
The current practices for different regions would be highlighted and addressed; looking at the advantages and disadvantages with a view to agree on what should be picked for onward acceptance and implementation.
Beyond the Conference
OUTCOMES OF THE SUMMIT
- In-Depth Understanding of Challenges: Stakeholders and participants will gain a deeper understanding of the challenges facing the unification of African currencies, including economic, political, and institutional factors. Identifying and comprehending these challenges is crucial for formulating effective strategies.
- Policy Recommendations: The conference will result in the development of policy recommendations for addressing the challenges associated with currency unification. These recommendations may cover areas such as macroeconomic convergence, institutional capacity building, and legal and regulatory frameworks.
- Regional Cooperation and Collaboration: Stakeholders and participants will discuss and emphasize the importance of regional cooperation and collaboration among African countries to facilitate the unification of currencies. Strengthening regional ties can contribute to a more cohesive and integrated approach.
- Public Awareness and Education: The conference will highlight the need for public awareness and education regarding the benefits and challenges of currency unification. Public support is vital, and informed discussions can contribute to garnering public understanding and acceptance.
- Exploration of Alternative Models: Stakeholders and participants will explore alternative models for currency unification, drawing on experiences from other regions or proposing innovative approaches that suit the unique characteristics of African economies.
- Discussion on Sovereignty and Autonomy: The conference will stimulate discussions on the balance between regional economic integration and maintaining the sovereignty and autonomy of individual countries in their monetary policies.
- Identification of Opportunities: Stakeholders and participants will be encouraged to identify potential opportunities and benefits associated with currency unification, such as enhanced economic stability, increased intra Africa trade, and improved global competitiveness.
- Engagement with Stakeholders: The conference would serve as a platform for engaging with various stakeholders, including policymakers, central bankers, academics, and representatives from the private sector. Collaborative efforts among these groups are essential for successful currency unification.
- Establishment of a Framework for Future Discussions: The conference will contribute to the establishment of a framework for continued discussions and collaboration on the topic. This could involve the creation of working groups, research initiatives, or follow-up conferences to track progress.
- Networking and Relationship Building: Stakeholders and participants will have the opportunity to network and build relationships, fostering ongoing collaboration and information-sharing beyond the conference.
- Presentation of white paper to select government bodies and financial institutions with deep penetration across the regions.