With the repeated discussions about a common BRICS+ currency, there has been close inspection on how other countries are planning to form joint currencies.
At the BRICS summit in South Africa in 2023, the idea of a BRICS currency was put on the back burner as an integrated currency is very complex.
In February this year, three African countries announced that they too were looking at forming a common currency to counter the dollar.
However, the three – Niger, Burkina Faso and Mali – are all being run by military juntas, who seized power through coups.
But in February, the head of Niger’s ruling military junta, General Abdourahmane Tiani, spoke of a possible creation of a common currency – saying this was a first step towards breaking free from the legacy of colonisation.
The three have formed a new defence alliance, known as the Alliance of Sahel States (AES).
The Economic Community of West African States (Ecowas) has condemned these coups and imposed sanctions on the countries involved.
In response, these countries decided to withdraw from Ecowas.
However, they remain members of the West African Economic and Monetary Union (Uemoa).
Uemoa has a common currency, the CFA Franc, which is issued by the Central Bank of West African States (BCEAO).
So what would it then take for the three African countries to form a common currency?
Experts agree that there needs to be a deposit of a portion of foreign exchange reserves at a central bank, which would then need to be created.
There would also need to be common budgetary policies and an integrated market for trade.
Other prerequisites include common government policies and economic stability.
Power was taken through armed coups so there needs to be some sort of guarantee that there will be a return to democracy – or at least stability.
Sanctions are very damaging when it comes to economic growth and curbing inflation.
The creation of a common currency also may lead to the currency being boycotted by other states calling for change.
Some experts agree that change is not always brought through a gun – but often through the rules of money – and without stability, a currency will battle in isolation.
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