Africans traded with one another before the arrival of the Europeans. Trade by barter was the world’s most common form of exchanging goods and services, locally and across the seas. Cowries replaced trade by barter. Later, coins and gold replaced cowries. The way to strengthen African currency is to increase its buying power within our big population. What we are doing right now is weakening each African currency with euro and US dollar exchange to trade with one another.
Illogically, we are making foreign currencies our common currency. Once we have our one currency, there will be an adjustment period since some countries think their currencies are worth more in value. This is based on the amount their currencies presently exchange for in overseas markets. If Western and Eastern Germany had relied on that notion, there would have been no currency unification there. Currency by itself has no value, it is only when price is put on goods and materials that we come up with currency worth.
People forget that American dollars became the dominant world currency as a means of exchange because Europeans, their cousins and financial partners transfer the power from Pounds to their Dollar. Before then, we had to labor hard to get cowries as the means of exchange for our goods and services. After cornering African gold into their vaults but could not get enough to back their currencies, gold standard was abandoned.
Western world started printing pretty papers without gold backing and made it available worldwide in exchange for their Treasuries, Futures, goods and services. Devaluation worked so well for China, Western countries cried foul! Countries devalue their own currencies to boost demand for locally manufactured goods and services. Reducing the cost of a country’s exports makes them more competitive on a global scale as a member of a trading block.
Imports become more expensive, discouraging consumers with foreign tastes. While Western countries may weaken or devalue their currencies slightly to boost their exports, African countries have no artificial or finished goods that are allowed to enter their markets except cheap raw materials which are sold at the price foreigners dictate.
Even when President Obama was able to allow some African products into the market, AGOA regulations only allow a few in. Indeed, most of the food products allowed into their market rot before clearance. This creates double losses of depriving African exporters of income and limiting available food at home; setting local food prices higher and unaffordable to the poor.
If Africans are forced to purchase goods domestically at a lower price, the increase in domestic spending is supposed to stimulate money circulation within one’s own economy. As exports begin to increase with local production of finished manufactured goods and services, there African and foreign markets to sell into. Due to cheaper prices at home for domestic consumers and high imports prices, it ultimately decreases trade deficits. Unfortunately, a country that shunned its domestic production in preference for foreign imports burns itself from both ends. https://corporatefinanceinstitute.com/resources/economics/devaluation/
If African countries had unified currencies and traded with one another primarily before outsiders, it would have been more difficult to pick on each country one by one to destroy our economy. The Western countries are even going further into social issues that are not acceptable in their own countries, threatening economic sanction unless they dictate to Africans who they can marry. We have to ask Africans after colonization, religious and cultural conquests, where does it end?
It was many years ago when the Nigerian pound and naira were traded in African countries and overseas. The Nigerian Government had to change its money by a certain date to discourage selling naira overseas. The big boys hurriedly brought back their naira into the country for exchange to the new notes. Before then, there was a Civil War, Nigeria did not have to borrow its way through. When Naira was introduced in 1973, it remained one to a dollar and a half US dollars.
Foreigners branded pop culture from Cliff Richard, Elvis Presley to Michael Jackson; cars, clothing and ammunition. It worked so well, even Japan became rich on automobile exports. The Asians who Americans thought could not make luxury cars came out with Acura, Infiniti, Lexus, Mazda, and Genesis worldwide. These are exports trading in American dollars. When the American Auto Workers revolted against Japanese made cars, Japan started building automobile plants in the United States blurring the preference for local and imported cars!
Divide and rule is not a new phenomenon, it has always been used to disrupt and gain upper econonmic advantageous relationships. Individual African currencies are not the exception. Every country in Africa has been manipulated through its currency. The only sin Zimbabwe committed was demand that promises after promises be kept on land reforms. The Zimbabwe dollar has become almost useless. Developing countries should not float their currencies https://hal.science/hal-02432744
Awards bestowed on Mugabe to postpone land reform could no longer work unless Mugabe wanted to risk the anger of his people. It is obvious that Western and Asian countries have dominated the exports of finished goods in artificially manufacturing goods like plastics, used goods and garbage into African countries. This enabled the Western world to determine how much to pay by manipulating exchange rates that put African currencies at the lowest trading currencies in the world.
Until the early 70s Oil Embargo, Africans had no say in the determination of prices of overseas goods and materials since foreigners also determine the prices of our goods and materials which they buy cheaply at any price they want. Consequently, with foreign currencies the flow of trade is limited within Africa and exploded with countries overseas whose currencies we use.
Unfortunately, covenants of goodwill play a crucial role on how labor, goods and material are determined in disadvantageous relationships between stronger and weaker partners. Kwame Nkrumah had tried Cocoa Embargo well before the Arabs, but it failed because some African and South American gave up. Embargo worked when the Arabs with a few developing countries held on and were able to determine the price of their natural resources.