African Union (AU)

African nations are continuing to be challenged by the task of increasing economic integration within themselves and decreasing their reliance on currencies and financial systems from outside of the continent. The majority of intra-African trade occurs using major international currencies, specifically the United States Dollar and the Euro. The use of these foreign currencies increases the cost of transactions, leaving African economies vulnerable to the instability of those foreign currencies, and making regional trade less stable due to external influences. Therefore, as African states are trying to increase economic cooperation, the option of becoming more monetarily independent has grown in relevance. There is a possibility that a single African currency could simplify cross-border trade by eliminating the requirement for currency exchanges and decreasing transaction costs among member nations. A single African currency may also help further integrate the economies and work along with other initiatives, including the African Continental Free Trade Area (AfCFTA). However, alongside the benefits, there will be issues regarding sovereignty since adopting a single currency will force states to give up control over their own national monetary policies. Therefore, the African Union must assess if a single currency is a feasible and advantageous method towards achieving higher levels of regional economic independence or if there exist alternative methods that may accomplish the same goals with fewer risks. Delegates must weigh the advantages of increasing intra-African trade versus concerns related to economic stability, national sovereignty, and the disparities among economic conditions throughout the continent. Instead of assuming that a single currency is either essential or possible, this Council must determine which type of monetary cooperation will best facilitate Africa’s long-term economic integration.