Single Currency to Boost Africa Trade
If African countries were to adopt only one policy to boost economic growth and improve macroeconomic stability, they should reduce the number of currencies in circulation across the continent as quickly as possible. Doing so would most likely encourage trade, as it happened in Europe with the arrival of the euro, and could help contain inflation – which is always good for growth – by imposing international discipline on monetary policy.
The African Union is now aiming at pooling all the continent’s currencies into a single currency by 2028. In the meantime, several regional monetary unions are on the drawing board, in addition to the two monetary unions that already exist, one de jure and the other de facto. The premier and oldest of these unions is composed of the 14 countries that belong to the Economic and Monetary Community of Central Africa and the West African Economic and Monetary Union.
Ugandan Cos. Venture into Regional Trade
The market for Ugandan manufactured goods is likely to grow faster within the EAC and the COMESA regions than within the EU. According to a recent survey on the impact of the global recession on Uganda’s exporting companies released by Uganda Export Promotion Board, in collaboration with the International Trade Centre, entitled ‘Credit Crunch Survey Uganda Report 2009’, at least 51.7 percent of traders experienced less international demand, while only 21 percent experienced lower domestic demand.
The global economic slowdown has forced Ugandan exporters to shift base from the traditional markets of UK and US and seek safer havens in the region. In order to survive in business, exporters are increasingly tapping into the regional markets, especially in the EAC and COMESA. Experts in the industry say, because of this, the trade volume between Uganda and COMESA alone has increased to over 40 percent, up from 37 percent a few years ago.