The South African Central Bank governor Lesetja Kganyago said that the adoption of an African currency will not achieve its goals due to the difficulty to reach a’macroeconomic convergence’. Kganyago claimed that the currency would need identical levels of inflation the same fiscal policies, as well as banking regulations among countries in Africa. “Absent these, it’s not possible,” he said.

Kganyago further stated that the plans of the heads of the BRICS group of nations that comprise Brazil, Russia, India, China and South Africa for a single currency will require an economic union similar to that of the European Union.

“If the BRICS leaders believe this is the direction they’re planning to go… it’s going to be necessary for an economic union. You’ve need to achieve macroeconomic convergence” Kganyago said. “And crucially, you’ll need the discipline mechanism to deal with nations that are not in the rules of. The euro project has demonstrated exactly the opposite.”

Source: zawya.com