African Monetary Union

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The African Monetary Union (AMU) is the proposed creation of an economic and monetary union for the countries of the African Union, administered by the African Central Bank. Such a union would call for the creation of a new unified currency, similar to the euro; the hypothetical currency is sometimes referred to as the afro or afriq. [1] The single African currency is to be composed of currency units made up of regional union reserve bank currency units of which are made up country specific currencies (The Arab Maghreb Union (AMU) - Northern Afriq, Southern African Development Community (SADC) - Southern Afriq, Economic Community of West African States (ECOWAS) - Western Afriq or ECO, East African Community (EAC), Eastern Afriq - Common Market for Eastern and Southern Africa (COMESA) - Central Afriq etc.).

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The Abuja Treaty, an international agreement signed on June 3, 1991, in Abuja, Nigeria, created the African Economic Community, and called for an African Central Bank to follow by 2028. As of 2019, the plan is to establish an African Economic Community with a single currency by 2023. [2] [3]

Regional currency unions

There are two existing regional currency unions in Africa, using the West African CFA franc, and the Central African CFA franc, respectively. Additionally, the Common Monetary Area links several countries in Southern Africa based on the South African rand.

The African Union's plans for further integration encourage the development of more such regional unions as an intermediate step to full monetary union. One proposed union is the eco, a proposed currency for members of the Economic Community of West African States (ECOWAS).

AFRO prototype art project

In 2002, Mansour Ciss and Baruch Gottlieb created a "prototype" currency, called the AFRO, which they presented at the Dakar Biennale of Contemporary African Art on May 10. It was designed by Dr. Professor Boamh. [4] [5] The project was a response to the perceived lack of independence created by use of the CFA franc. Notes and coins of the imaginary currency were produced, and given away or sold to the people of Dakar and Senegal to encourage them "to reflect on the meaning (value) of money and the future of their own local currency". [6]

Membership

In 2015, Anthony Maruping stated that Kenya, Uganda, Tanzania, Rwanda and Burundi were committed to join a common currency in the next ten years. [7] So far only three of the 53 member states of the African Union in 2009 have committed to using the currency (in 2022, the African Union has 55 members).[ citation needed ]

Egypt, Eswatini, and Lesotho have logged reservations over the precise date of monetary union and have requested a two- to three-year delay. [8]

Seychelles may not join as a result of economic fears and may, along with Cape Verde, attempt to join the euro [9] at a later date, while the official currency of Mayotte is the euro. [10]

African Central Bank

The African Central Bank (ACB) is one of the three financial institutions of the African Union. It will, over time, take over the responsibilities of the African Monetary Fund.

The creation of the ACB, to be completed by 2028, was first agreed upon in the 1991 Abuja Treaty. The 1999 Sirte Declaration called for a speeding up of this process, with creation by 2020. [11]

When it is fully implemented via Pan-African Parliament legislation, the ACB will be the sole issuer of the African single currency (African Monetary Union/Afro), will become the banker of African Governments, will be the banker to Africa's private and public banking institutions, will regulate and supervise the African banking industry, and will set the official interest and exchange rates in conjunction with the African Government's administration.

The current timeline established by the Abuja Treaty calls for a single African currency to be instituted by the African Central Bank by 2028. [ citation needed ] Although some countries have reservations about full economic and monetary union, several regional monetary unions already exist, and others are planned.

Signatories

Signatories to the treaty were all members of the Organisation of African Unity (predecessor of the AU) at the time (Eritrea, South Africa, South Sudan and Morocco have since joined): [12] [13]

CountryOfficial currencyInformal currencyNote
Algeria DZD
Angola AOA
Benin XOF
Botswana BWP
Burkina Faso XOF
Burundi BIF
Cameroon XAF
Cape Verde CVE EUR Once mooted joining the euro in the long term; lodged a formal reservation over the start date, etc.
Central African Republic XAF
Chad XAF
The Comoros KMF EUR
Republic of Congo XAF
Côte d'Ivoire XOF
DRC CDF USD
Djibouti DJF
Egypt EGP Lodged a formal reservation over the start date, etc.
Eswatini SWL
ZAR (pegged at parity 1:1)		Lodged a formal reservation over the start date, etc.
Ethiopia ETB
Equatorial Guinea XAF
Gabon XAF
The Gambia GMD Planning to launch the Eco at an earlier date.
Ghana GHS Planning to launch the Eco at an earlier date.
Guinea GNF Planning to launch the Eco at an earlier date.
Guinea Bissau XOF
Kenya KES
Lesotho LSL
ZAR (pegged at parity 1:1)		Lodged a formal reservation over the start date, etc.
Liberia LRD USD Planning to launch the Eco at an earlier date.
Libya LYD
Madagascar MGA
Malawi MWK
Mali XOF
Mauritania MRO
Mauritius MUR
Morocco MAD
Mozambique MZN
Namibia NAD
ZAR (pegged at parity 1:1)
Niger XOF
Nigeria NGN Planning to launch the Eco at an earlier date.
Rwanda RWF
Sahrawi Arab Democratic Republic EHP EUR
São Tomé and Príncipe STN
Senegal XOF
Seychelles SCR Once mooted joining the euro in the long term; lodged a formal reservation over the start date, etc.
Sierra Leone SLL USD Planning to launch the Eco at an earlier date.
Somalia SOS
South Africa ZAR
Sudan SDG
Tanzania TZS
Togo XOF
Tunisia TND
Uganda UGX
Zambia ZMK
Zimbabwe ZWL (see note)As of 29 January 2014 the South African rand, Botswana pula, pound sterling, Indian rupee, euro, Japanese yen, Australian dollar, United States dollar and Chinese yuan are all legal tender in Zimbabwe.

See also

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References

  1. ↑ Alao, Adeyemi College of Education (ACE) Department of Economics. "African single currency: The Great White Hope for a New Africa". Ondo, Nigeria. Archived from the original on 13 April 2014. Retrieved 7 May 2015.
  2. ↑ "Profile: African Union". BBC News. 2006-07-01. Archived from the original on 12 July 2006. Retrieved 2006-07-10.
  3. ↑ "Treaty Establishing the African Economic Community". The African Union Commission. Retrieved 2019-06-25.
  4. ↑ "Deber International Reinigungsfirma Hamburg –". Deber International Reinigungsfirma Hamburg. Archived from the original on 2012-11-16. Retrieved 2016-05-08.
  5. ↑ "The Afro, a prototype currency for all Africa". portal.unesco.org. Archived from the original on 2008-08-16. Retrieved 2016-04-12.
  6. ↑ The Afro Today Archived November 16, 2012, at the Wayback Machine
  7. ↑ "Africa: AU Summit – African States Consider Single Currency, Passport". Premium Times (Abuja). 2015-06-13. Retrieved 2017-02-04.
  8. ↑ (According to the BBC on January 3, 2008)
  9. ↑ Portugal, Rádio e Televisão de. "Últimas – RTP Notícias". tv1.rtp.pt. Retrieved 2016-05-08.
  10. ↑ Minister of the Economy, Industry and Employment (France). "L'évolution du régime monétaire outre-mer" (in French). Archived from the original on 2004-11-19. Retrieved 2008-11-30.
  11. ↑ Paul R. Masson and Heather Milkiewicz (Jul 2003). "Africa's Economic Morass--Will a Common Currency Help?". The Digital Collegian. Archived from the original on 2007-10-09. Retrieved 2006-04-22.
  12. ↑ "African Economic Community (AEC)". Archived from the original on 2004-02-22.
  13. ↑ "AU2002:AEC/Abuja Treaty". Archived from the original on 2008-05-12. Retrieved 2008-09-21.
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