7TH GHANA INTERNATIONAL TRADE & FINANCE CONFERENCE – GITFiC 2023
Topic: Finance under the theme; Sovereign Economic Vulnerabilities; An Endorsement for a Single Currency for Africa – with ECOWAS as a case study.
(Regional Central Banks are expected to lead in this conversation)
Regional economic communities, RECs, in Africa, have been struggling with the creation of common currencies since their inceptions. For the Economic Community of West African States, ECOWAS, the struggle commenced since 2003, when the Eco was scheduled to circulate. We have witnessed several postponements since then, the latest being from the set date of 2020 to 2027. All agents desire a developed, prosperous and united Africa. But if asked about using a common currency, many decision makers run into uncertainties and ambiguities. For many policy makers, the decision of whether to accept a common currency is a big irritation and an embarrassing nuisance. Academics tend to be intellectually dishonest about the importance of a common currency in an economic community. Some display remarkable niceties and dexterity via, the near impossibility and incongruence of a common currency in most African RECs. On the other hand, others, are quick to go into the exegesis of economic integration in, stating, inter alia, that economic unions tend to ensure the free flow of human and material resources among cooperating nations, and hence, countries uniting tend to benefit. But this is intellectually dishonest, because only when common money is instituted can there be the kind of benefits everyone is talking about regarding economic union and cooperation among nations. The Euro and the United States Dollar are success stories.
Common currency is a necessary condition for an economic community to exist but not sufficient. It is sufficient when there is political unification. This fact that common currency is only a necessary condition for an economic community to operate gives some flexibility for the African Union and its constituent RECs to establish a functional common currency that will kick start a rather uninspiring, invariant economic fortune, befalling her since the colonizing countries of Europe departed the shores of Africa more than fifty years ago. A common currency is itself a signal to a promising and prosperous economic union, bringing to fruition the role money plays in traditional individual economies throughout the world and throughout time. But the new opportunities in the expanded multistate economy bring added platforms for money to play an accelerated and deepening function in not just banking and financial development but also in the overall living of the unionizing people.
We at the Ghana International Trade & Finance Conference – GITFiC have up our advocacy over the years on a single currency in Africa as an enabler of a safe and efficient financial environment, which has a direct correlation on national payment procedure. This is relevance for monetary policy, financial stability and overall economic development interests. Central banks monitor developments in the payment systems to assess their impact on the demand for money, monetary policy and financial system stability. Central banks can advise on payment related financial policy and act as effective catalysts, together with private sector organizations, in initiating, promoting and contributing to Cross Border Trade. The achievement of a single currency for Africa will eliminate Payment & Settlement barriers (currency convertibility hurdles plus or minus) and bring the needed reforms in Africa’s financial sector.
The 7th Ghana International Trade and Finance Conference (GITFiC) 2023 will mount a spirited advocacy on Policy formulators and implementers to commence with a SINGLE TRADE CURRENCY and thereafter focus on the role played by financial institutions in Africa in achieving a single continental currency. Hopefully, this phrase will cut the chase. The conference will put development issues in the context of the optimum currency area in order to determine the extent a common currency will be beneficial for the African continent.
Africa’s currency fragmentation remains distasteful and obstructs reforms and progress. The 7th conference will highlight the leadership or catalyst role by providing policy directions, preparing roadmaps in consultation with stakeholders, and guiding National and Regional discussion to close all bottlenecks and hindrances in achieving this. The need to identify a name, own the IP and ‘’coheres’’ central banks to implement, is now or never in lieu of the implementation of a Continental Free Trade Agreement. There are several existing enabling structures on the African continent to facilitate the adaptation and implement a single trading currency for the continent and examples are;
1. All regional blocs already have vibrant and functional regional central banks
2. The continent already has regional trading blocs
3. The continent already has a central bank association
4. The continent already have an effective, efficient and functional union ie; AU
5. The continent already has several regional financial institutions and mechanisms such as the African Development Bank, ECOWAS Bank, Trade & Development Bank, AFREXIMBANK etc…
In lieu of these and several other structural infrastructures, a single trading currency should be now or never; we at GITFiC so believe in.
Topic: Trade and Healthy Investment under the theme; Actualising Africa’s Industralisation Agenda in the era of the AfCFTA; The Role of Africa’s Small and Medium Scale Enterprises – with Ghana as a case study.
(The AU is expected to lead this conversation)
Small-and-medium size Scale enterprises (SMEs) are crucial towards actualizing Africa’s Industrialization Agenda in the era of the AfCFTA for inclusive socio-economic development and growth. This is because SMEs are generating work opportunities, income, and wealth creation, and thereby, enhancing poverty reduction. SMEs account for approximately 80% of jobs in Africa and this makes SMEs a significant mechanism for socio-economic growth. Within Sub-Saharan Africa, there are approximately 44 million SMEs. In addition, the African Continental Free Trade Area (AfCFTA) promises to expand access to regional and continental-wide export markets for SMEs. Further to this, the Sustainable Development Goals and the African Union acknowledges that Africa’s drivers of economic growth and long-term sustainability for emerging markets are dependent on the potential of the effective development of the SME business framework. The presence of SMEs in all sectors of Africa’s economy is signifying the vital role of the African Continental Free Trade Area (AfCFTA) in steering the socio-economic development and growth of the African continent.
In Africa, SMEs are essentially contributing towards job creation and employment for a large populace. For example, 80-90 percent of the population in African countries such as Ghana, South Africa Ethiopia, Ivory Coast and Kenya are employed within SMEs which represents 50-70 percent of the official GDP; lacks effective payment, regulatory and institutional frameworks to support cross border digital trade and fragmented regulatory frameworks and this continues to limit the potential to unlock the benefits of intra-African trade. In addition, SMEs are attributed and accredited for identifying and creating new markets and serving as the foundation for new companies. Through the AfCFTA, informal and micro and small enterprises will be integrated into the continental markets breaking the barriers these businesses constantly encounter as they try to penetrate more advanced regional and overseas markets.
The AfCFTA is expected to enhance competitiveness, promote industrial development through diversification and regional value chain development, and foster sustainable socio-economic development and structural transformation. Small and medium-sized enterprises will benefit from easier means to supply inputs to larger regional companies, who then export to overseas markets. However, despite the positive influence towards the development of the Africa continent, SMEs are still facing tremendous and restrictive obstacles that are impeding their long-term survival and contribution to the development of Africa. Informal cross-border trade in Ghana, Kenya, Tanzania, South Africa and Ethiopia which represents 50-70 percent of the official GDP, lacks effective payment, regulatory and institutional frameworks to support cross border digital trade and fragmented regulatory frameworks and this continues to limit the potential to unlock the benefits of intra-African trade. To enable the implementation of AfCFTA, an evaluation of opportunities and bottlenecks for an effective cross border trade in the sub-regions are fundamental. Strengthening and consolidating Africa’s SMEs has a huge potential of driving every economy and also serve as an essential step for economic recovery and inclusivity given the impact of COVID-19 on businesses and economies.
Cross Border Trade is anticipated to grow and expand rapidly in lieu of the AfCFTA in the coming years and Africa’s SME is expected to drive this success. Africa’s Industrialization agenda is also targeted at facilitating the improvements in technology and the emergence of new digital products and business models. SMEs grow and expand to become industries therefore, if the growth of Africa’s SMEs becomes a deliberate agenda, Africa will be bound to achieve its massive industrial growth targets.
The 7th Ghana International Trade and Finance Conference (GITFiC) 2023 will entail among others an assessment on the roles SMEs, governments and private sector will play in achieving the goals set for the various AfCFTA implementation phases. We at the Ghana International Trade & Finance Conference – GITFiC believe that Africa’s industrialization is a catalyst to a successful intra African Trade hence the AfCFTA.
Important Resource Pages to visit:
https://gitfic.com/regional-seminars-on-afcfta/ (Our Regional Seminars on the AfCFTA)
https://gitfic.com/monthly-research-reports/ (Our Monthly Research Reports)
https://gitfic.com/press-releases/ (A few selected media reportage since 2017)