• The common currency, the euro, brought weaker economies close to collapse 10 years ago.
• The East African common market still suffers from non-tariff trade barriers.
At the International Monetary Fund meeting in Washington last week, various African countries including Kenya said they were committed to having a common African currency to facilitate continental trade.
Treasury CS Ukur Yatani said he expected the monetary union and common currency to be in place within five or six years.
However, the commendable aspiration for a common currency is fatally flawed.
Firstly, we are struggling to implement a common market in East Africa. There is supposed to be free movement of labour yet work permits are refused to citizens of member states. Non-tariff trade barriers prevent farm produce and manufactured goods from flowing between countries.
Why run before we can walk? Let's fix the common market before getting a common currency.
Secondly, a common currency requires great fiscal discipline among member states. The euro allowed weaker European countries like Greece to go on a borrowing spree that ended with financial collapse. How would we stop smaller countries go on over-spending sprees if they had a stronger currency? Richer countries like Kenya would end up bailing them out.
It's not yet time for a common currency in Africa.
Quote of the day: "I have no Napoleonic dream. I'm just hard-working and pragmatic."
The Russian oligarch was born on October 24, 1966