President of South Africa Cyril Ramaphosa has suggested creating a single currency for Africa which, according to him, could boost trade across borders and match international currencies.
The idea was first mooted by Ramaphosa during a meeting of the African Union in Rwanda, where 44 countries gathered to sign the African Continental Free Trade Area (CFTA) treaty.
“The hour, the day, and the moment could have arrived for Africa to have its own currency so that we get out of our heads this colonial mentality of relying on other people’s currency. We can match that currency with others,” Cyril Ramaphosa told African leaders.
Currently, there are over 40 different currencies in Africa, with many of them struggling to maintain value. In 2008, Zimbabwe’s national currency soared to a staggering inflation rate of 89 sextillion (a million raised to the power of six) percent.
The CFTA treaty, which was agreed by the heads of state during the meeting, may result in the biggest free-trade area in terms of participating nations since the establishment of the World Trade Organization.
The deal is expected to come into effect within six months, and the leaders hope the plan will boost prosperity for 1.2 billion Africans.
It is expected to erase trade barriers such as tariffs and import quotas, providing free movement of goods and services among member states.