Published in the Daily Nation on 29th November 2013 at http://www.nation.co.ke/oped/Opinion/-single-currency-idea-/-/440808/2091920/-/pcg3pt/-/index.html
In the old days, it used to be said that to
be a proper country, you needed to have a national airline, a football team and
a national beer. The criteria evolved somewhat, to include a stock exchange
(even one where the traders sat around desultorily for lack of work) and a
currency (however many zeros you needed to buy a loaf of bread). Well now, all
that is being thrown out the window. The national airlines were taken over by
the accountants and shut down. We’re all slavish fans of the English Premier
League, so we brush past national team captains without so much as a
by-your-leave. The beer companies have gone multinational, and, with the new
laws, who needs beer anyway? The stock exchanges limp along. And now, if the
gnomes in Arusha have their way, wave bye-bye to the national currency as well.
Quietly, without fanfare or the usual
braying from us in the media, a deal has been negotiated and finalised to get
rid of the various flavours of shillings and francs circulating within the East
African Community. The protocol, which is destined to be signed this Saturday,
commits the five country to a near-irreversible ten-year timetable, at the end
of which (in the EAC Secretariat’s blandly-worded press release): ‘national
currencies will not be used alongside the East African currency in the single
currency area. Indeed, there cannot be two legal tenders in one single currency
area’. See ya, Kenya Shilling!
Now, there’s nothing intrinsically wrong
with the united currency plan. It stitches East Africa closer politically and
economically. It will make it easier for the region to do business as one
entity when there are no currency worries to take care of. And, the most
fervent boosters hope, it will make an East African Federation an inevitability
(you can start placing your bets as to who wants to be the EAF’s first
executive President).
However, there is much to worry about. The
first objection to the plan is the ‘It’s the Euro, Stupid’ argument. The
world’s premier experiment in a united currency is in a shambles. And this is
in a region with much closer economic ties than the EAC. And with a much more
elaborate plan, developed for half a century or longer, about monetary union.
The Euro has fallen apart on a familiar altar – sovereignty over economic
affairs is still confusingly shared. There are complaints that the Eurozone’s
strongest economy, Germany, runs roughshod over weaker members. Concurrently,
there is also a contradictory complaint of feckless German leadership on the
issue. The result is a two-speed union (sound familiar?) that is threatening
economies the world over.
The planners in the EAC (and here’s the
second argument) seem to be proceeding with no regard for any argument against
monetary union. Even after this year’s unusual contretemps about the increasing
division in the EAC, it’s full speed ahead, icebergs be damned. It’s the
equivalent of continuing your journey despite all the alarming noises coming
from beneath your engine, and the increasingly frantic entreaties from
onlookers to at least stop and have a peek beneath the hood.
And one wishes that the bystanders had at
least a chance to even see the vehicle involved in the journey. East African
citizens have been treated as noisy, but harmless, gnats to be swatted away if
they seek to know more than they should about union. The grand experiment has
been conducted at Presidential and ministerial level, with very little input
from the people who actually have to live in the brave new world.
I did not even get to the economic
arguments against union (which I will as soon as the first outraged missive
comes from Arusha – and, likely, Haile Selassie Avenue) castigating this
article for its scepticism, ignorance and naïveté.
So wish the Presidents luck this Saturday.
And start keeping some shillings and francs in your desk drawers as mementos.
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