Single Currency and Central Bank In Africa: Is It Real?
OREANDA-NEWS African countries are seriously thinking about creating a single currency of the continent and the common Central Bank. Tarek Amer - the head of the Central Bank of Egypt said about it in Thursday. It may take a quarter of a century.
He spoke at a press conference in Sharm El-Sheikh following a two-day forum of the Association of Central African banks. "The Association has really started to take steps towards this great goal: we have started to develop rules and measures that will allow to create an African Central Bank and a single African currency," said Amer.
The head of the Central Bank of Egypt believes that the single currency of the continent may appear in 2043, as this will require "the consent and political will of the leaders of African States, as well as the achievement of certain economic and financial indicators."
Among these indicators, he called the level of economic growth, inflation and foreign exchange reserves, budget deficit, balance of payments, as well as the legislative framework.
On the March, 21 this year, 44 African countries signed a Treaty to establish a Continental free trade area (CFTA). It happened in Kigali - the Rwandan capital. These Treaty should bring trade between the countries of the Black continent. Currently, inter-African trade accounts for only 16 per cent of Africa's total foreign trade.
Continental free trade area provides a gradual abolition of customs duties between the African countries. According to the forecasts of the African Union, by 2022 trade between African countries will increase to 60 per cent. It is assumed that free trade between African countries promotes growth in industrial production and reduce dependence on exports of raw materials.
But, in others opinion, African economies are still too young and not diversified enough for this to be viable and sustainable.
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