Viewpoint: After the Free Trade Agreement, We Need to Focus on Realizing the African Monetary Fund
By Danny Bradlow & William N Kring
African Union (AU) leaders will gather in Niger on July 7 for an Extraordinary Summit to discuss the African Continental Free Trade Area. They will be meeting at a critical moment for the continent. Many African countries are experiencing uneven growth and rising debt. All face an uncertain global environment and need the boost that closer and more dynamic continental trade relations could deliver.
In our view the AU leaders should also use their meeting to reinvigorate their efforts to create an African Monetary Fund. This would be used to encourage African states to engage more actively in regional trade by offering them financial support for managing the risks associated with closer regional integration and expanded intra-regional trade.
Over the past 10 years, most regions have developed regional arrangements that can supplement the help that the IMF provides to countries facing balance of payments problems. Ten years ago, $100 billion was available through these regional funds. Today more than $900 billion is available through these arrangements. Africa is currently the most prominent gap in the evolving global financial safety net.
Photo courtesy of BBC World Service.