Global Policy Forum

By Badru D. Mulumba

Africa Sterling, Africa Shilling, Africa Franc, or separate currencies? Africa's central bank chiefs yesterday grappled with a debate over the possibility of a single currency for the continent. The governors, converged at Speke Resort Munyonyo for the 27th annual meeting of the Association of African Central Banks (AACB), also noted that for the project to succeed, there must be political backing.

President Yoweri Museveni addresses the meeting today when Bank of Uganda Governor Emmanuel Tumusiime-Mutebile assumes AACB chairmanship for one year from Algeria's Mohammed Laksaci. "We owe it to the future generation to establish a single monetary union; to me, time is of the essence," Mr Andrew Mullei, the governor of the Central Bank of Kenya, told fellow governors and deputy governors representing 38 African countries. "A common currency and a common central bank - monetary co-operation is already a reality. The major problem is the time it is taking to realise the advantage of a monetary union," he said.

Mullei was discussing a presentation by Prof. Roy Barrel, the head of the Institute of Economic and Social Research, UK. Barrell said that political commitment is an important first step to establishing a single currency. The Euro for instance, he said, took long (more than four decades) to be launched in Europe since it was first mooted - because there were political differences especially between France and Germany.

"I agree that there is need for political commitment; it is one without which we can not establish a monetary union," Mullei said. "It does not matter what technical work you do if there is no political commitment." To an African, a single currency, Mullei said, removes costs of converting money from one currency to another among African countries.

The governors are meeting under the theme, Sub-regional Monetary Integration: Challenges and Prospects.

Mr Amanya Mushega, the East African Community secretary general, said that Africa can not do without regional integration. Mushega pointed out that the argument against further integration is that development within the countries is unequal. "But this is the same thing within the countries themselves," he said. "It is the same in Kenya. It is the same in Tanzania. It will be easier to solve these problems when we are in larger groups."

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