One common African currency (The Afric)
• How the World Bank-lMF can help
By: Anis Haffar
The umbilical connections between the past and present were defined by Gamel Nasser, Ben Bella, Nnamdi Azikiwe, Kwame Nkrumah, Haile Selassie, Jomo Kenyatta, Patrice Lumumba, Nelson Mandela, and others, for a continental, African unity.
The true economic compass for Africa resides in the vision of the men who led the freedom struggles. Never in Africa’s history was so much owed to so few by so many. Even in death, providence smiled on Africa's favourite sons.
In all, the feeble, solo efforts in their respective struggles for freedom, confirmed the urgency for one continental force, one voice, one economy, one money. Though today's challenges may contain new factors, the essentials are not that different. In thinking into the future, the commitments of the mavericks were relevant for that time as it continues to be for today.
The challenge was to make the lives and souls of the pioneers not soft padding for hypocritical posturing at AU meetings, but vehicles to continue what was in Africa's best interests.
The batons - relayed to our generation - were retrieved in blood, sweat, and tears. The purpose is to spur into action, for a common cause, all the latent strengths of the various African states.
The core interests in eliminating poverty in Africa remained imperative. That continental cause could put all Africa in a splendid, new light. Going it alone was like using pebbles for sea defenses.
History has fascinating but strange and expensive ways of revealing itself. The pioneers had a vision of Africa's resources harnessed optimally in Africa's interest. The imperative was for an African Union, vis-a-vis: the economies of scale, continental resolutions and defence, one respectable voice in international affairs, as we see in practice by China and India today.
The vast economic changes taking place in the world are of immense concern. While Africa's leaders continued to debate and scatter endless positions in thought, others have reached certain positions in fact. If China could manage and feed 1.3 billion citizens, and India over a billion, couldn't Africa do the same for a smaller population? Could a balkanised, disorganized, aloof, flighty China or India be so adept and influential in so short a time?
India, for one, presented an impressive model. Delineated by caste, feudalism, untouchables, umpteen religions, numerous linguistic blocks, and hundreds of independent principalities - India was never one nation. "That it has survived as the world's biggest democracy and is now emerging, with over a billion people, as an economic giant, is one of the remarkable tales of modern times," said the Economist.
To begin with, Africa paid a stiff price for not trading internally among the neighbours. It was estimated that only a meager 4% or so of Africa's trade was with one another. And who could possibly trade and enhance good sociability amid a guzzling, puzzling, frustrating, tribal array of currencies: ekuelas, lilangenis, ouguiyasl dinars, dirhams, dalasis, nairas, cedis, francs, rafkas, birrs, kwazas, shillings, zaires, rands, pulas, dobras, leones, escodos, pounds?
It's beyond a big joke; it's abnormal! The sheer multiplicity of currency set-ups, printing costs and commissions alone were self-destructive. Naturally such insidious expenses were hugged as secrets; but the wanton behaviours inadvertently supported the very same inequities the founders fought to eliminate.
Worse, the erratic monetary divisions invited chaos, exchange headaches, clearing difficulties, transaction costs, banking stalemates, suspicions, cunning middlemen, inflated prices, and a posse of hassles which no good government or global partners should want.
Scrutinizing and selecting safe nations, what honest "strategic" investor, small or big, will take such states seriously? So uncoordinated, sporadic, temperamental, amorphous, and fractious, Africa's currencies have gone way past the point of ridicule. By not getting our acts together, Africa got poorer by the day, and as usual - like the survival of the fittest - women and children suffered the most.
The bigger balkans (the so-called regionalists) were equally tiresome: ECOWAS, AMU, CEMAC, ECCAS, SADC, COMESA, EAC, ICAD, CEN-SAD: how long had they not been bandied about? And when will the anticipated manna come from heaven? But the groupings - properly aligned and defined - could be most useful as regional subsidiaries of one African Central Bank (ACB), with focus on one wholesome, convertible currency, the" Afric".
Every strong central bank supported a strong currency. All of China has one key currency - the Yuan; India - the Rupee; the United States - the mighty Dollar; continental Europe - the Euro. The best examples and practices are no secrets.
Why the heaps of World Bank/IMF analyses and Africa advisory reports, year after year, skipped such obvious essentials was a legitimate question. Maya Angelou (the PanAfrican, poet laureate) put it bluntly: If you were not part of the solution, you were part of the problem.
In lieu of the usual Africa doomsday reports and serial adhoc ventures, future World Bank/IMF reports should be proactive. The point is to quit the gloom, and not live inside it.
Perhaps that was what the World Bank Group President, Mr. Robert Zoellick, meant in his address to Africa's heads of states and government at the 12th Ordinary Session of the AU at Addis Ababa (reported 5 Feb 2009) when he said he was "here personally, to listen and learn from you about your concerns, and how the World Bank Group can be a better partner. We want to build with you".
For starters, the World Bank/IMF should subsequently help implement a most decisive aspect of the 2004-2007 African Union Plan of Action, Priority Programme 16: "Towards a Common Currency" prepared by the Commission of the African Union, in May 2004.
[For the above objective, The Constitutive Act of the AU, Article 19, The Financial Institutions, defined The African Central Bank (ACB), and adopted it at Lome, Togo, 11th July, 2000].
A common currency will enhance the vision and purpose of the founders and forge much closer economic links in Africa. The important thing is to support continental trade and markets, and elevate the standards of living of as many people as possible, and quickly, so that the appeal to leave one's domicile is not that profound.
The faster money moved within any economic system, the more jobs and wealth it created in the process. Opening up all borders indiscriminately, for one, will create an instant avalanche of migration and confusion the scale of which the host states cannot stem. In lieu of physical mass movements of people, a useful currency served as the real mover and shaker, the engine of growth.
The World Bank Group must use their expertise to help with the critical task of the setting up partnering structures to link up the currencies on the continent. The object is to develop meaningful indices that establish parities with the specific purpose of tying the various currencies into one comprehensive unit, the" Afric".
Fast-track currency integration in Africa will soon create a common pool of international reserves, convertibility, financial stability, trust, credit, and multiplying effects throughout the continent. As the "Afric" prospered so will the World Bank Group itself be acclaimed as bona fide, visible partners. The Dollar, Euro, Yuan, and Rupee presently enjoy huge economic benefits for their respective regions. This is Africa's time.
In his article "Time to herald the Age of Responsibility" (The Financial Times, 29th January 2009) Mr. Zoellick asked appropriately: "How will the first half of this century be defined?" He recommended (alluding to Barack Obama's "Yes, we can" and "Change we can believe in" script) that "sustainability take precedence over the enrichment of a few. That means a focus on creating growth that includes opportunities for the poor ... microfinance and lending to small entrepreneurs," and so on. Mr. Zoellick could be on the verge of history, the right side, so to speak.
This is an opportunity for Africa to embrace Mr. Zoellick for a continental currency. He seemed a renaissance man, ready for the task. Of course, it was preferable that Africans themselves lead in this strategic cause. But where leadership tends to lay back in self-grandeur when will the continent itself progress? What miracles do we ever foresee in Africa without bold economic measures? The worse pity was that the next generation, if not guided, might continue the very same rackets in lieu of pursuing Africa's best interests.
Americans are practical role models: They are exemplary at supporting their own geniuses to set up useful systems so that any average person could scale the top and gain from that vantage point.
Imagine the chaos if every American traveler or business person had to exchange currency, at every state border, from California to New York, or from Oregon to Florida; or an Indian from the historic Amritsar (North) to Madurai (South).
But, in Africa, the meaningful disciplinary structures that would benefit the AU and hence all Africans were the exact same things that some leaders ganged up against and stonewalled. What should have been "a slam dunk", considering such clear examples of visionary paths for Africa's future, was consistently deflected.
Africa's monetary seizures - caused by the proliferation of cheap, disconnected currencies - prostrate the economic progress of the continent. The structural inequities continued to breed lifelong poverty at the bottom. Civil and religious societies should add their voices.
In the meantime, the richer nations - not suffering the laxity of the inept - wove superiorities in monetary controls, finance, management, and production into competitive advantages, and would not look back. Having measured monetary efficiencies, on a cumulative scale, in all aspects of finance, trade and industry, they carried into profitable execution carefully prepared plans of action. That was the story behind Africa's diminishing 2% of world trade. Donor aids and feel-good millennium bonanzas smack of short term benefits only; in the long haul, they were trifles compared with the potentials lost to this gigantic, resource-laden continent.
Doomsayers boasted how cruel fortune was to Africa, and other fallacies which the local political chiefs yielded too quickly to. The World Bank Group should desist from using valuable resources to focus unduly on the negatives. With Mr. Zoellick at the helm we should see a renaissance, with the unveiling of Africa’ s very own currency, the" Afric".
Poverty is a scary, tricky thing, but can be eliminated:
And, governance or international trade need not be zero-sum games; the quantum can be greater than the sum of its parts. Wealth can be created, especially when resources are managed and allocated productively for the general good. In the end, Africa's prosperity will ripple through the entire globe. We live to see a brighter day.
[The writer is the founder of Gate Institute for continuous teacher education in English Language skills, and Methodologies for Leadership-centred teaching for primary, secondary, and tertiary levels. E-mail: email@example.com.
Wednesday, 18th February, 2009