A
single currency – the magic wand?
One basic feature of the present stage of the capitalist system is that
it takes desperate measures to confront the problems that it created in
the first place. Such measures are mere reforms, which, even if they
appear to work, only do so for short periods and in the interests of
only a section of the capitalist class. Society therefore has the
appearance of moving but in actual fact it at best, stands still and at
worst, moves backwards. Following is an example of one such desperate
attempt which is currently plaguing European capitalists but which,
ironically, is being blindly contemplated by West African leaders.
An impossible task?
When the Economic Community of West African States (ECOWAS) was created
in 1975, the establishment of a single currency was high on its agenda.
However, the implementation of the idea has been dogged by delays and
inconsistencies one of which is the absence a second monetary zone. At
the December 1999 summit in Lome, Togo the ECOWAS decided that the
non-CFA Anglophone countries – Gambia, Ghana, Liberia, Nigeria, and
Sierra Leone – together with Cape Verde and Guinea (Conakry) should
come up with a second unitary currency. This second currency (the Eco)
was to be launched by 1st January 2003 as a first step towards the
creation of the single West African money.
As a fast-track route to the attainment of this second common currency,
the West African Monetary Institute (WAMI) was set up in 2001 with
headquarters in Ghana. The WAMI put forward certain economic conditions
for the five countries (Cape Verde and Liberia not being fully
committed to the project) to meet before further action could be taken.
These criteria included reducing budget deficit to not more than four
per cent by 2002; limiting inflation to five per cent by 2003; keeping
central bank financing of budget deficit at under ten percent of the
previous year’s revenue; and maintaining foreign reserves equivalent to
at least six months’ imports by 2003.
However, and this was not unexpected, in November 2002 at the end of
another summit in the Guinean capital, Conakry, the ECOWAS issued a
statement postponing the launch of the Eco from 1 January 2003 to 1
July 2005. They had just realised their inability to meet the
unrealistic conditions they had set themselves.
False hopes
The founding fathers of the ECOWAS and their current successors saw the
need to create a single currency because in their ignorance of the
operation of the capitalist system they hoped such a venture would wipe
out all the woes of their people. In the words of the current vice
president of Ghana, Alhaj Alieu Mahamam, it “will provide the
sub-region with the economies of scale to be derived from a bigger
market (and it) underpins all our aspirations of unity captured by the
slogan ‘a common currency in a common market in a common country’ ”.
These proponents of the single monetary zone also think that it will
attract foreign direct investment through a stable macro-economic
environment and a larger single market; facilitate free movement of
goods, services and labour; and lead to reduced transaction costs.
These would, in their view, enhance economic growth and eventually
reduce poverty. They also believe that a monetary union will naturally
foster unity in their balkanised people who now see themselves in the
colonialist terms of Anglophones, Francophones and Lusophones.
The snag
This mission of creating a single currency will be hard to accomplish
owning to the near-impossibility of the five countries meeting the
ambitious conditions necessary for the creation of the second monetary
zone. Then there are other more serious hurdles, which may adversely
impede the project. Foremost among these is the local capitalists and
their, mostly Western, masters who control the various central banks
through their control of the various governments. They may see their
petty profit interests being threatened by the creation of a single
West African central bank. It is arguably not unrelated to this fear
that some individuals with vested interests have openly voiced concern
over the issue. The chairman of Guardian Express Bank Plc, Moses O.
Ihonde, for instance gave a banking conference at Enugu,Nigeria a
frightening talk on how banks will have to battle with increased
operational costs at the introduction of the proposed West African
common currency (West Africa magazine, 11 – 17 November 2002).
The reality
But even if the West African leaders are able to stem the tide of these
and other unforeseen impediments and are able to create this single
currency, the problem of poverty, hunger, disunity, illiteracy,
disease, etc will still be the lot of the masses. The reason is that
the international economic game, in which West Africa is but a mere
pawn, does not work in the interests of the masses. The people here are
mostly engaged in farming. They produce raw materials – cocoa, coffee,
timber, minerals, etc to feed the factories in the West. Then
they buy their food requirements – maize, rice wheat flour, etc from
the West. But the system operates such that these West African
producers of primary products do not determine the prices of their
products just as the prices of what they import are beyond their
control. Therefore they sell their exports cheaply and pay through
their nose for their imports. But that is the way of capitalism. It
ensures that the capitalists take all profits accruing to the economic
transactions away from the masses. And that is the cause of the
poverty, hunger, disease and all the ills afflicting the masses. This
being the case, there is no way that the creation of a single currency
can successfully address such problems. This fact can even be gleaned
from the situation of the people of the CFA zone that spread over West
and Central Africa. Their countries have very little trade links
amongst themselves. And in spite of the fact that they use a common
currency, the economic situation of the masses is neither better nor
worse than their counterparts in the multi-currency non-CFA zone.
Central to the capitalist relations of production is the element of
money. Production is organised such that people work to produce goods
and services not for the purpose of consumption, but they produce them
to sell at a profit. In other words, goods and services are commodities
to be sold and bought. But since the means of producing these
commodities are owned and controlled by a few individuals, it is they
who own the products. They sell them and keep the proceeds. On the
other hand, the producers – the working class – who are excluded from
the ownership of the means of production are left with little or no
money at all to buy what they produce and need! And herein lies the
prime source of all the problems of present day society.
The introduction of a common currency will therefore be, to the masses,
as irrelevant as was the switch from the British and French money to
the present currencies at independence. The fact is that the ordinary
person, the working class person will still not have enough of it to
buy the necessities of life.
Society can only turn things round when the means of production and
distribution of wealth are commonly and democratically owned. When that
happens, production of goods and services will be conducted through a
harmonious co-operation of all humanity. Under such an arrangement, the
products of mankind’s collective effort will be freely accessible to
all and thus money, as a medium of exchange in all its forms, will
completely disappear.
SUHUYINI
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