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Economics

كيف نطلق العنان لإمكانات إفريقيا الاقتصادية؟

Sep 23, 2022 Landry Signé

واشنطن العاصمةـ ستشهد أفريقيا عما قريب تحولا في أنشطتها الاقتصادية. إذ من المتوقع أن يصل الإنفاق الاستهلاكي والتجاري في القارة إلى ما يقرب من 16.1 تريليون دولار بحلول عام 2050. ويوفر الازدهار القادم فرصًا هائلة للشركات العالمية- وخاصة الشركات الأمريكية التي تبحث عن أسواق جديدة. ولكن، إذا لم يكسر صانعو السياسة الأفارقة الحواجز القائمة أمام التجارة والاستثمار الإقليميين، فإن اقتصاد القارة سيعاني الأمرين للوصول إلى إمكاناته الحقيقية.

وستعمل اتفاقيتان تجاريتان رئيسيتان- قانون النمو والفرص في إفريقيا (AGOA)، ومنطقة التجارة الحرة القارية الأفريقية (AfCFTA)- على تسهيل التجارة بين البلدان الأفريقية مع بعضها البعض ومع الولايات المتحدة. وتعِد الاتفاقيتان معًا بإزالة العوائق طويلة الأمد أمام التصنيع.

ويمنح قانون "AGOA" )أغوا( الذي أقره الكونغرس الأمريكي في عام 2000، بعض دول إفريقيا جنوب الصحراء فرصا تفضيلية تمكنهم من الوصول إلى التجارة، ومن تصدير منتجات معفاة من الرسوم الجمركية إلى الولايات المتحدة. وعلى الرغم من أن صلاحية القانون ستنتهي في عام 2025، إلا أن استراتيجية الرئيس الأمريكي، جو بايدن، اتجاه أفريقيا جنوب الصحراء، التي تم الكشف عنها في أغسطس/آب، تسلط الضوء على تأثيره الإيجابي، وتعد بالعمل مع الكونغرس بشأن سبل المضي قدمًا بعد انتهاء صلاحية قانون "أغوا"

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David Punabantu Sep 24, 2022

What exactly do we mean by "Free Trade". It is not exclusively isolated to products but currencies. The fundamentals of Supply and Demand as propounded by Adam Smith has underlying axioms that are over looked by Africa. It is important to understand the underlying axioms to that theory. He wrote about British goods being bought by British Sterling pounds whose supply and demand created a "price".
If a German with D-marks wanted British goods he/she could not buy the British goods directly with German D-marks but first had to convert his/her D-marks into British Sterling pounds. The supply and demand of D-marks and British Sterling pounds (British citizens supplying British Sterling pounds wanting to buy D-marks to buy German goods) set an "exchange rate" between the D-mark and British Sterling pound The D-marks buy British Sterling pounds which are then used to purchase British goods.
This means the production of all British goods is weighted or represented by the British Sterling pound which is the TITLE DEED to the British economy.
That is why you can go to the United Kingdom with US dollars and they will NOT accept you to buy anything from the United Kingdom until you change your US dollars into British Sterling pounds. You can have a Euro from the European Union and go to the United States of America (USA) and try buying any goods from the USA. They will refuse you to buy any goods directly from the USA with a Euro unless you first change your Euro into a US dollar.
For Africa it does not directly communicate economically with each other through their national currencies but through the US dollar or Euro. Thus the first axiom to create "free trade" is non existent.
A clear example of how "not free" is Africa is seen in the IMF fixed cross rates. Cross rates represent the exchange rate between the British Sterling Pound and the US dollar. On August the 23 2022 the exchange rate between the Sterling pound and the US dollar was £1 per US$1.179. The cross rate of the South African Rand being R17.016 per US dollar and R20.063 per £1 gives a cross rate of 1.179. The Nigerian Naira US dollar rate was at the same time N420.07 against a Sterling pound rate of N495.424. The cross rate of the Naira thus was the same exchange rate between the UK and US. This is the pattern across the entire spectrum of African currencies. The question that arises is does South Africa and Nigeria have the exact currency liquidities in their money markets day in and day out to mimic the exact exchange rate between the UK and US? Are the money markets of South Africa equal to the money markets of Nigeria, Ethiopia, Zambia etc that have the same cross rate value? Is this "cross rate value" a representation of a "free value" system? Does this distort the allocation of resources within Africa?
It must be remembered but often overlooked by academia that the Great Industrial Revolution was more to do with a Bank Revolution in which One Sterling Pound carried more assets than liabilities. How many "assets" do African currencies carry outside their borders to claim the trophy of "free trade area".
It is tempting to talk of a Single Currency as the next step but it will enrich certain countries at the expense of other much like Brussels dominates the EU economically as does New York.
The single currency syndrome already exists in Africa in value terms as seen in the single value of the IMF fixed cross rates. The end result is the US dollar becomes dearer hence inflating the cost of US products.
The pitfalls of a single currency are well observed in the defunct Sterling Area As noted in September 1949, when the British Sterling pound liquidated its overseas capital assets, when it devalued the British Sterling pound by 30.5 per cent, as it faced a convertibility crisis. Members of the Sterling Area in Basle like Agreements, who had their foreign exchange reserves in the believed infallible British Sterling pound, watched helplessly their reserves liquidated.
This forced them to devalue their national currencies by a similar margin, as if they had the same economic and financial strength, size posture as Great Britain. Argentina, Australia, Burma, Ceylon, Denmark, Egypt, Eire, Finland, Greece, Iceland, India, New Zealand, Norway, Trans-Jordan, Sweden, Uruguay, Union of South Africa, Iraq to name a few, devalued their national currencies by 30.5 per cent. The Netherlands devalued by 30.2 per cent, France by 21.8 per cent, West Germany by 20.6 per cent and Thailand by 20.6 per cent. Today when the US dollar's purchasing power falls Africa's import costs increase.
For Africa Free Trade has to involve African currencies freely trading within their money markets and between money markets to arrive at a market price with the US dollar in each national market. Currency arbitrage would equal quotations between markets. The only rule that should exist is that the final payment of goods and services should be in the country of origin of the goods and services national currency. In that Africa ends up with a Federation of Currencies. Remember prior to 1966 countries like Zambia sold her copper at the producer price in her national currency and achieved an exchange rate of US$2.80 per Zambian Kwacha. It is the same system China uses as the final payment settlement system for Chinese goods are in Chinese Yuan Renminbi. This is the same path Russia has recently followed and saw the Russian rouble appreciate from the sanction hit rouble from R150 to R55 per US dollar as it demanded payment for her oil and gas at a discounted price in Russian roubles.
The commonality between Russia, China, the US, the UK, Japan, EU is noted in what former editor of the London Financial Times Mr. Geoffrey Crowther in his book "An Outline of Money" in that "if a purchaser is some one who wants D-marks in order to pay for German exports, the fact that he can get his marks cheap is equivalent to a reduction in the price of exports; it will stimulate sales in exactly the same way as an ordinary depreciation of the exchange rate." (Crowther Geoffrey (1951) p.260).(download online)
Note it is German D-marks buying German goods and that China has done by a "reduction in the price of exports" to stimulate US dollar inflows. Although China quotes in US dollars her foreign currency regulations see that the final payment settlement system for Chinese firms is in Chinese Yuan.
What the US needs to do is to create a "cheaper US dollar" to deal with "cheap Chinese goods" within Africa. This is easily done by having US firms have the final payment settlement in the national currencies of the exported goods. In other words US dollars needs to flow directly into the African money market to get local African currencies to settle export payments. The effect of this was clearly seen prior to 1966 April when Anglo-American Corporation and Roan Selection Trust sold Zambian copper in the local currency at a producer price.
As late as in April 1966 Roan Selection Trust (RST) and Anglo American Corporation (AAC) sold Zambian copper at £336 per ton and were under political pressure to increase their producer prices, as the LME
price was at £753 per ton. This pressure become a reality on April the 25th 1966 when late Finance Minister Wina forced mining companies to sell Zambian copper on the LME whose payment settlement only accepts US dollars, the Euro, the Japanese Yen, the British Sterling Pound and recently the Chinese Yuan Renminbi.
This changed the format of the final payment settlement system for Zambia from Kwachas to US dollars and other accepted LME currencies. This made the US dollar under a US dollar final payment settlement system dearer.
A higher price being paid for foreign currencies acts like a tariff on imports that, “certain countries, particularly in Latin America, have used them [multiple currency] as a means of restricting imports without resorting to complicated administrative controls.”(IMF Annual Report (1948) p.27)
To this end, “the Fund discussed [the] practices under which part of the exchange earnings or their equivalent are to be retained by exporters…Most of these practices have discriminatory currency features; some are clearly multiple currency practices.”(IMF Fourth Annual Report on Exchange Restrictions (1953) cited in Tew (1967) p.82)
Such practices infringe on the Fund’s Agreement that “no member shall engage in…any discriminatory currency arrangements or multiple currency practices.” (Articles of Agreement: Article VIII Section 3 (2011)). The practice of having one window of FX transactions driven by commodity exports and another window driven by Kwacha purchases goes against the IMF articles. This “Multiple selling rates… discriminate either to the categories of transactions for which payment is to be made (e.g. payments to the United States may be penalized by making the US dollar dear). The latter type of discrimination inevitably corresponds very closely to disorderly cross-rates.” (Tew (1967) p.81).

Tew Brian. International Monetary Co-operation 1945-67. 9th ed. London: Hutchinson & Co Ltd, 1967.

Articles of Agreement of the International Monetary Fund (IMF) (2011) http://www.imf.org/external/pubs/ft/aa/
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