Audio By Carbonatix
A trade expert has charged members of the Africa Continental Free Trade Area (AfCFTA), to adopt the US dollar as a common currency for trade.
Richard Ampabeng said it will facilitate transactions for the free trade area which is expected to become operational by January 2021..
He said a lack of common currency for African nations will not hinder trade, noting trade in the world currently revolves around the dollar, pounds, yen and the euro.
"Given the nature of our economy in Africa, again the fragmentation of African states, it's a bit difficult to talk about a common currency now,” he stated in an interview on Joy Business Market Place segment with Sandra Esinam Afenu.
According to him, the AfCFTA pact is not distant from the World Trade Organization's (WTO) rules, making the case that about eight members of the European Union do not use euro but trade in the EU market.
Africa on August 17, 2020 officially unveiled its single market secretariat in the capital of Accra, Ghana in preparation to officially commence trading after several postponements due to covid and other bottlenecks encountered by members with regards to trade agreements.
Most currencies used on the African continent have been battling against the US dollar over the years with some volatile economies like Ghana which plays host to the AfCFTA, setting up an FX committee to investigate the cause of the free fall of the cedi.
The South Africa rand and the most populous nation on the continent, Nigeria have had its currency, the naira depreciating against the US dollar.
Many have raised concerns over the status of the West African common currency the 'eco' which has never seen the light of day.
"Those of us within West Africa could use the eco while trading with other member countries" Mr Ampabeng added.
He believes it will be better for trade to commence while member states work with a common currency other than the dollar in the near future.
He again stressed on the fact that not all countries will be ready before trade starts, hence the 26 countries that have signed onto the AfCFTA pact should go ahead to trade while the rest [28] join later.
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