Africa’s Single Currency Project As Facebook Unveils Libra – Revisiting My African Union Papers

Africa’s Single Currency Project As Facebook Unveils Libra – Revisiting My African Union Papers

As a consultant to the African Union Commission, I wrote this paper on its currency integration. In my doctoral program on banking and finance, I did works on economic integration and currency with layers of technology. That remains my appreciation to defunct Diamond Bank which funded that program.

This push for a single currency stands for an Africa of unity, integration and strength. However, there is a huge possibility of potential failure of a single currency if implemented haphazardly with enormous consequences to not only Africa’s global image but also for individual countries’ economies and, ultimately, the people.

A single African currency has many promises in terms of boosting trade across the continent and benefits for all member states through synergy and symbiosis. It has the capacity to increase economic cooperation among member AU nations and stimulate faster development efforts across the continent (Debrun, 2002). Many African nations are still oriented in trade toward former colonizers in Europe than immediate neighbors and across African capitals; there is an understanding that currency unification could be a key catalyst to transforming the continent.

The major challenge is how the continent could develop the plan to have this unified monetary union considering the opsided economic structures among the nations, which can affect response strategy during economic crises. This is fundamental as if major regional economic powers stay out of this unification for fear of being net losers, it could have adverse effects to realizing the continental goal.

Sure, I am all electrons now. But I cannot forget this paper which was extremely critical during the debate. I made my point that before Africa could have a single currency, it must first have prior convergence of the regional economies. Typically, currency union results to loss of sovereignty (for union members) of using traditional tools to drive monetary policies since a supranational bank formed from the union becomes the collective driver. If the integration fails, the result would be massive welfare losses to citizens. (This is one reason I am asking for caution on ACFTA; we need to get the “rule of origin” right).

With Facebook Libra, the game plan has changed as I had noted. Meanwhile, I am working on a Harvard Business Review piece on how Libra will affect Africa’s economy.

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3 thoughts on “Africa’s Single Currency Project As Facebook Unveils Libra – Revisiting My African Union Papers

  1. I beg to disagree with your position sir.

    There are loads of progressive efforts being made by young visionary entrepreneurs who already started building relevant solutions even before Facebook and its partners decided to wade into it, after a long period of actually blocking cryptocurrency related advertisements on its platform.

    Sadly there is little or no interest by those with access and clout to get closer, analyse the available indigenous solutions and say, “hey guys, how can we support this, put it on a pedestal and make it a case study to stimulating the dialogue of connecting Africa using the Blockchain?

    Check the efforts of start ups such as KuBitX, Korapay etc and their working solutions such as the KuBitX PROW (on Google Playstore) and see how “African stable coins” have been employed to facilitate instant transfer of value. A case in point is the Nigerian stable coin developed by KuBitX which today can be used to pay for all kind of bills and utilities in Nigeria, as well as some other African countries – all done with a lean budget and limited resources!

    I believe people like you need to be more sensitive to the efforts of young, determined, industrious and resourceful teams who only need access – not necessarily capital but – mentoring, connections and endorsements to thrive.

    The talk shop will hardly add significant value to struggling entrepreneurs who have quality creative products that can solve important problems in Africa.
    Most of the things you say, carry weight but end up being tapped by foreign interests with access to capital who then build and revert with solutions that further exploit our society and leave us with pennies

    We have to be deliberate, just as the USA decided to put in place documents such as the National Security Council Memorandum 68 (1950) to consciously empower their own capitalist entrepreneurs to dominate the world. We can begin this as a strategy and movement not necessarily by the government, but by people like you with enormous exposure who can pool like minds to begin this journey and prepare the future today.

    Africa is still green and we must seize the moment to tackle our many unsolved problems using exponential technologies like Blockchain, AI, IOT, Big Data and the likes in order to create sustainable public wealth for the next fifty years and beyond.

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