Single Currency: A Boon to All Africans

Published on 3rd March 2009

On behalf of the Chairperson of the African Union Commission, His Excellency Mr. Jean Pin, and indeed on my own behalf, I wish to express sincere thanks to all of you for having accepted our invitation to attend this inaugural Congress of African Economics, on the theme “Towards the creation of a single African currency: Review of the creation of single African currency, which optimal approach to be adopted to accelerate the creation of the unique continental currency?” Your presence here is a clear manifestation of the importance you attach to Africa’s continental integration process. This is cause for optimism and I am now even more convinced that the laudable objectives we are pursuing, as a continent, will be achieved sooner rather than later. The task ahead is huge; the route to the top is steep; and the challenges are immense; but together, we shall overcome all difficulties.

By offering to host this historic inaugural Congress, the Government and People of Kenya have demonstrated their commitment to the realization of Africa’s continental integration agenda, as outlined in the Abuja Treaty establishing the African Economic Community, the NEPAD Vision, the Constitutive Act of the African Union, as well as the various African Union decisions intended to accelerate the implementation of Africa’s integration agenda.

This congress, which we intend to institutionalize as an annual even, aims to create a platform for economists in academia and research to contribute to the ongoing policy dialogue in Africa, with a view of finding broad-based solutions to the socio-economic problems of the continent. It has as its targets African academicians and researchers, including those in the Diaspora, national and regional association of economists, Regional Economic Communities, and pan African institutions, among others.  This is a window for the academicians and researchers to provide advice to Africa’s decision makers, at national, regional and continental levels.

It is clearly evident that, at present, the link between researchers an academicians on the one hand and policy makers on the other hand is either weak or non-existent. This Congress and subsequent ones to follow, aim at addressing the aforementioned weakness as well as creating an opportunity for academicians and researchers to have an impact on policy at the national, regional and continental levels, particularly regarding Africa’s integration process. Its recommendations will be submitted to the relevant Decision Organs of the African Union, Governments of Member States and Regional Economic Communities.

The quest for the socio-economic and political integration of Africa dates back to Africa’s political independence. The colonization of Africa will forever be recorded in history books as a key event that retarded the socio-economic progress of the African continent. However, this is an event in history and its significance today is the opportunity it creates for Africans to reflect on their past with a view to informing decisions for the future. the future of Africa depends on the extent to which we are able to come together as African, work together, and speak with one voice. This way, Africa can become a force to be reckoned with on the global stage.

Our leaders, in 1963, guided by their love for the continent and great foresight, agreed that unity was the way forward and decided to form the Organization of African Unity (OAU). This historic event was followed by a series of milestones in the quest to create a single and unified Africa, including the adoption of the Lagos Plan of Action and Final Act of Lagos in 1980; the adoption of the Treaty establishing the African Economic Community, also known as the Abuja Treaty of 1991; the Sirte Declaration of 1999, which focused on reviewing the Abuja Treaty and accelerating its implementation; the establishment of the African Union in 2001 and the adoption of the NEPAD programme; and the subsequent launch of the African Union in 2002. History will judge all these events as wise decisions taken by the leadership of Africa for the betterment of the continent.

The African Union continues to pursue the objective of achieving rapid socio-economic and political integration of the continent. Challenges such as the current financial and economic crises can be much better addressed when we harness our efforts and work together as a continent. What better way to achieve this than through integration?

Among the activities currently being pursued are the establishment of the credible and functioning peace and security architecture; the establishment and strengthening of political institutions such as the Pan African Parliament, the African Court of Justice and the African Commission on Human and People’s Rights; the establishment of three pan-African financial institutions, namely the African Central Bank, African Monetary Fund and African Investment Bank, as provided for by Article 19 of the Constitutive Act of the African Union; private sector promotion and development, and investment facilitation; and infrastructure development.

We cannot talk of integration without discussing means of facilitating movement of persons, goods and services and cutting down on transaction costs. For integration to yield benefits, greater volumes of trade among the Members must take place. Hence, Africa must enhance efforts towards breaking down existing barriers. One of the key elements of such a move would be the elimination of multiple currencies and move towards the adoption of a single currency. How exactly that should be done is a matter for theoretical debate and empirical analysis. What is, however, clear, as all economists will confirm, is that there are clear tangible benefits to adopting a single currency.

The Congress is taking place at a time that the African Union Commission, working in collaboration with Member States of the African Union and in particular the Federal Republic of Nigeria, and the Association of African Central Bank Governors, is currently undertaking efforts to establish the African Central Bank in Abuja, Nigeria, as decided by African Union Heads of State and Government. In this regard, discussions are ongoing with the Nigerian authorities to sign a Memorandum of Understanding for the hosting of a Technical Steering Committee to undertake implementation studies on the Bank

In addition, the African Union Commission and the Association of African Central Bank Governors have agreed to work jointly on the establishment of the Bank and a Joint Technical Committee has been established. It is therefore our sincere hope that this inaugural Congress will contribute significantly to the currently on-going work of the African Union Commission on the establishment of the African Central Bank leading to the creation of a single currency.

The current global financial crisis demands that Africa works together in a co-ordinated fashion and put in place sound and prudent macroeconomic policies. The creation of a single African currency is one way to this. It is in line with this that the recently concluded AU Assembly of Heads of State and Government decided that work on the establishment of the African Central Bank leading to the creation of  a single currency be expedited.

At the level of the African Union, we will continue to pursue various ongoing initiatives with a view to accelerating the continental integration process. Economists and researchers have a key role to play in this process.What the continent needs are ideas and I am strongly convinced that there are ideas galore in Africa. It is our wish that the Congress will service as an effective platform to share them with policy makers. I wish the Congress great success.

Excerpts from Dr Maxwell M. Mkwezalamba's opening statement during the opening of the First Congress of African Economists at KICC, Nairobi, Kenya. Dr Mkwezalamba is Commissioner for Economic Affairs, African Union.

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