Kenyan president calls for single African currency

Kenyan President William Ruto has called for the introduction of a single African currency to ease trade on the continent. He made the proposal at the 22nd Common Market for Eastern and Southern Africa (COMESA) heads of State and Government Summit in Lusaka, Zambia, on Thursday, June 8, 2023.

Ruto argued that a single African currency would make it easier for businesses to trade across borders, reduce transaction costs, and boost economic growth. He also said that it would help to reduce the dominance of the US dollar in African trade.

The proposal has been welcomed by some African leaders and economists, but others have cautioned that it is not yet feasible. They argue that African countries need to first harmonize their monetary and fiscal policies before they can adopt a single currency.

The idea of a single African currency has been around for many years, but it has never been seriously implemented. However, the launch of the African Continental Free Trade Area (AfCFTA) in 2021 has given new impetus to the idea. The AfCFTA is a single market of over 1.2 billion people, and it is expected to boost intra-African trade by up to 50%.

If a single African currency were to be introduced, it would be a major step towards economic integration on the continent. It would also make it easier for African countries to compete in the global economy. However, it is important to note that there are still many challenges that would need to be overcome before a single African currency could be successfully implemented.

Here are some of the challenges that would need to be addressed:

• Harmonizing monetary and fiscal policies: African countries would need to agree on a common monetary policy and fiscal policy framework. This would be a complex and challenging process, as countries have different economic needs and priorities.
• Building trust and cooperation: African countries would need to build trust and cooperation in order to make a single currency work. This would require them to resolve their political differences and work together to achieve common goals.
• Overcoming technical challenges: There would also be a number of technical challenges that would need to be overcome, such as developing a common payment system and setting up a central bank for the single currency.

Despite the challenges, the idea of a single African currency has the potential to be a major driver of economic growth and development on the continent. If it is implemented successfully, it could help to boost intra-African trade, reduce poverty, and increase Africa's global competitiveness.