Prof. Jonah Onuoha, an academic expert, has emphasized the importance of closer collaboration among the 55 member nations within the African Union (AU) in their pursuit of a unified currency.
Onouha, who holds a professorship in International Relations and serves as the Head of the Political Science Department at the University of Nigeria, Nsukka, conveyed this viewpoint during a conversation with the News Agency of Nigeria (NAN) in Abuja on Tuesday.
This call for integration comes in the wake of Brazilian President Luiz Inacio Lula da Silva’s proposal at the BRICS summit in Johannesburg for BRICS member countries to establish a shared currency for facilitating trade and investment among themselves.
The primary objective of the Brazilian President’s proposal is to mitigate the exposure of BRICS nations, which include Brazil, Russia, India, China, and South Africa, to fluctuations in the exchange rates of the US dollar.
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The call entailed reducing the vulnerability of Brazil, Russia, India, China, and South Africa (BRICS) member countries to dollar exchange rate fluctuations.
Challenges in achieving a common currency
Professor Onuoha expounded on the challenge facing the realization of a common currency, considering the economic, political, and geographical disparities within the African continent.
He urged the AU to pursue greater integration to avert consequences that might arise from such a currency initiative in Africa.
While acknowledging the merit of BRICS’ proposal for a common currency, Prof. Onuoha raised questions about its feasibility.
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He pointed out that both the AU and the Economic Community of West African States (ECOWAS) have previously called for the adoption of a common currency without achieving significant progress.
Prof. Onuoha underscored the fact that common currencies do not emerge spontaneously but require the integration of economies.
He drew a parallel with the European experience, where the Euro was established after significant economic integration, the free movement of people and goods, the establishment of borders, and the creation of a customs union.
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- In his words, “The issue of BRICS calling for common currency is good, but is it achievable? AU and ECOWAS have been calling for a common currency, has it worked?
- “Common currency does not just emerge, they emerge through the integration of economies, even in Europe, before Europe had a common currency called Euro they were able to integrate their economy.
- “They also ensured free movement of persons and goods, set boundaries and were able to check their customs union and other issues.
- “The call for the common currency is okay, but it is not going to be achievable in the near future, because ECOWAS sees itself as a family for a common currency called Eco.
- “How about other sub-regions on the continent? They have not been able to do so because the African economy, as well as West Africa, is not integrated.”
The path forward: prioritizing integration
He argued that despite the appeal of a common currency, it is unlikely to materialize in the near future.
According to the Professor, this is because ECOWAS is primarily focused on creating the Eco as a common currency for its member state, leaving other African sub-regions without a similar initiative.
Professor Onuoha attributed the delay in achieving a common currency to the tendency of African Heads of State and Government to engage in discussions without translating their words into concrete actions.
In his view, African economies remain distinct from one another, lacking cooperation in key areas such as agriculture and infrastructure.
Consequently, the prospect of a common currency appears remote until a more robust framework for economic integration is established across the continent.
Professor Onouha ultimately encouraged AU member countries to prioritize integration as a necessary step forward realizing the dream of a common currency.
- In his words, “Our economies are still different; we are not cooperating on agriculture, not in infrastructure, not in anything, so how can you talk about common currency?
- “The BRICS idea is good, but whether it is achievable I do not think so in the near future, therefore the call on AU-member countries to integrate.”