The benefits and challenges of a unified Africa’s monetary policies was the focus of the keynote address by the Founding Chair, DePECOS Institutions & Development Research Centre (DIaDeRC), Nigeria, Professor Evans Osabuohien at the African monetary policies African Government Stakeholders Engagement Forum 2024 (AGSEF 2024) convened by Just Ibe and Edith Njage.
Delivering a paper titled, ‘The Importance of Public Financial Literacy in the Transition to a Single Currency: Political Will and Public Acceptance in Overcoming Obstacles to Monetary Union,’ Professor Osabouhien said a virile monetary union in the continent has the essential incentive to fosters trade, promote healthy competition, and transparent environment for member states to do business.
According to him, a single currency is the culmination of a monetary union endeavour, which most often have the inherent instrument to drive economic activities, but noted that it has many obstacles; such as political instability, external shocks, bailout, restrictions, and loss of economic sovereignty of member states; public financial literacy, political will, and public acceptance; we can manage these obstacles and realise the gains.
Speaking on the prospect of acceptability, the Professor of Economics, said general populace of member countries would gladly welcome the idea of a monetary union, noting that the institutionalisation of a monetary union across Africa has been fraught with low public acceptance across different regions in the continent with each regional economic community playing crucial role.
“To promote public acceptance, member nations must leverage technology to create an Africa-wide payment system like the Pan-African Payment and Settlement System (PAPSS), and possibly start from regional monetary union before moving continental,” he advised.
Professor Evans Osabuohien noted that there were obstacles and challenges bedeviling subregional monetary union. These include, member states prone to varying impacts of external shocks or economic turbulence, fiscal policy restrictions, political tension and instability within the union, loss of member states sovereignty over its currency and monetary policies, and the tendencies of bailout increase.
He, however, submitted that to address these obstacles to regional economic and monetary policies, there was need for the enlightenment of the general public’s understanding of monetary union, policies and practicalities.
According to him, this must cover all gamut of enlightenment using mass media, capacity-building of key actors across all levels of government, encouraging wider uptake of short courses and regularly holding roundtables, symposiums, public lectures, and seminars to bring all into the mainstream of happenings in that direction.
Professor Osabuohien said there were plethora of economic and trade benefits to the adoption of a monetary union within the subregion. “A policy in this direction will promote political integration of member states, help encourage market efficiency and inter-regional collaboration through price transparency, boosts trade among members and help businesses find new markets and thrive,” he posited.
In an earlier presentation, an entrepreneur and investor, Professor Ndubuisi Ekekwe (The Founder and Chairman of Tekedia Capital), in a paper titled ‘Prior convergence of Regional Economies as Path to Africa’s Monetary Integration,’ said a single currency without building the requisite infrastructure will not deliver the desired result of successful regional integration. Professor Ekekwe highlighted the importance of decent road network, connecting rail system amongst others infrastructural assets that must be put in place for the single currency initiative in the subregion to work.
Another Keynote Speaker at the forum was Dr Vera Songwe (Chair and Founder of the Liquidity and Sustainability Facility, and former Executive Secretary of the United Nations of the Economic Commission for Africa-UNECA). Dr Vera drew lessons from existing currency unions in her presentation titled ‘Lessons from Existing Currency Unions: The Eurozone and Others’.
Additionally, one of our DIaDeRC_ASMN Premium Members, Dr Monisola Ajeigbe, was also featured as a panelist. The Industrial and Financial Economist based in Canada spoke on Economic, Fiscal Policy, Trade, and Investment, alongside Dr Monsuru Alabi Sodeeq.
The African Government Stakeholders Engagement Forum (AGSEF) is a development ecosystem that serves Africans in the quest to delivering an environment that breeds creativity, entrepreneurship, collaborations, investments as key drivers to economic growth and development.
The theme of AGSEF 2024 ‘Monetary Policy: The Unification of African Currencies’ was carefully chosen to serve as a catalyst for change, fostering an environment conducive to economic advancement through the harmonisation of monetary policies and the unification of currencies in the continent.
