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African Monetary Union

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The African Monetary Union 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 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. The current plan is to establish an African Economic Community with a single currency by 2023.[2]

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, 2002.[3][4] 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".[3]

Membership

So far only 3 of the 53 member states of the African Union have committed to using the currency[citation needed].

Egypt, Swaziland, and Lesotho have logged reservations over the precise date of monetary union and have requested a two- to three-year delay.[5]

Seychelles may not join as a result of economic fears and may, along with Cape Verde, attempt to join the euro [6] at a later date, while the official currency of Mayotte is the euro.[7]

Ethiopia and Morocco have said that they are not interested in joining a currency union in 2028[citation needed].

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 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.[8]

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 the African Government, 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, a number of regional 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 and South Sudan have since joined):[9][10]

Footnotes

See also

References

  1. ^ Alao, Adeyemi College of Education (ACE) Department of Economics. "African single currency: The Great White Hope for a New Africa". Ondo, Nigeria. 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. {{cite news}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  3. ^ a b The Afro Today
  4. ^ "The Afro, a prototype currency for all Africa". portal.unesco.org. Retrieved 2016-04-12.
  5. ^ (According to the BBC on January 3, 2008)
  6. ^ [1]
  7. ^ Minister of the Economy, Industry and Employment (France). "L'évolution du régime monétaire outre-mer" (in French). Retrieved 2008-11-30.
  8. ^ 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.
  9. ^ "African Economic Community (AEC)".
  10. ^ "AU2002:AEC/Abuja Treaty".
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