Online Reporter
The Herald, 2 October 1991
PLANS for the setting up of a currency should begin with the strengthening of clearing houses and payments arrangements on the continent as a transitory measure, Dr Mbui Wagacha of the African Centre for Monetary Studies said.
Speaking in an interview with the Pan African News Agency in Dakar, Dr Wagacha, chief of division at the institution based in the Senegalese capital, described the clearing house as “an important leaning period for businessmen and a transitory weapon for increasing the volume of trade in Africa”.
Africa currently boasts three such institutions, the West African clearing house with headquarters in Freetown, Sierra Leone, the Central African Chambers of Payments and Compensation in Kinshasa, Zaire and the Preferential Trade Area for East and Central Africa (PTA) clearing house based in Harare.
But these, which in effect represent lower levels of monetary integration, need to be upgraded to handle increasing volumes of regional transactions as well as their area of coverage, he said.
Dr Wagacha suggested the enlargement of the list of commodities liable to transactions through the clearing houses.
He also said African governments should induce the business sector and the trading community to channel a wider range of goods through the clearing house.
He said the institutions could also be used as a channel for setting transactions on cross-border investments, services, air travels, payments of dividends on intra-regional investments, stocks and shares.
African clearing houses could also issue regional travellers cheques which makes it possible for travellers to use their national currencies in setting payment in other countries, which, he said, has the advantage of boosting tourism, trade and other economic activities.
Lessons for today:
The initiative proposed by Dr Mbui Wagacha in 1991 to strengthen African clearing houses as a step toward a common African currency was visionary and laid the groundwork for ongoing efforts in monetary integration across the continent. While the goal of a single African currency has not yet been fully realised, there have been notable successes and challenges along the way.
His proposal was forward-thinking and helped shape Africa’s monetary integration agenda. While a single African currency is still a work in progress, the strengthening of regional clearing houses, the creation of regional currencies, and the ongoing push for continental integration show that the initiative has had meaningful impact even if the ultimate goal is yet to be achieved.
Bongani Ndlovu