Asserting the possibility of a single currency shared by African nations was the Secretary-General of the African Continental Free Trade Area (AfCFTA) Secretariat, Wamkele Mene.
However, Mene said that for that to be achieved, certain macro-economic issues would need to be considered.
This assertion was shared over the weekend at a virtual event at the “Quarterly Press Briefing on AfCFTA Achievements, Status of Implementation, and the Next Steps Confirmation.”
Mene said, “I am confident that one day the African continent will have a single currency.
“Though there are a range of issues to be considered regarding macro-economic convergence.
“Thankfully, there are departments in the African Union (AU) to deal with the complexities about how we get to a single currency for the African continent.
“But certainly it is a positive step that will facilitate intra-African trade.”
On Currency Conversion
Mene stated that the annual cost of converting currencies stood at $5 billion, and to eliminate such high cost, especially concerning trading within the free trade area, the Pan-African Payment and Settlement System (PAPSS) – still in its early stage – was introduced.
He said, “We have 42 currencies in Africa. The cost of converting currencies amounts to $5 billion a year.
“This is very big amount of money that can be seen as revenue forgone. So we want to reduce and eliminate this cost to converting currencies in Africa for the purpose of trading.
“The PAPSS is a very important pillar for the implementation of the AfCFTA. We are grateful to Afreximbank for making liquidity available to operationalise the PAPSS.
“The pilot countries for PAPSS are Ghana, Nigeria Liberia and S/Leone. Local banks will be able to switch on to the platform once the platform is up and running throughout the continent.
“I hope the platform will be available for all African countries that want to switch on to it by the end of this year.
“This is one of the strongest signals so far that the AfCFTA can work, will work and will be effective.
“I believe that we will through the platforms be able to improve effectiveness of the SMEs.”