By Laudia Sawer
Tema, Aug. 15, GNA – The Centre for International Maritime Affairs, Ghana (CIMAG) has urged African countries to consider the use of the African Kingdom Lumi (AKL) currency to back and promote the Africa Continental Free Trade Area (AfCFTA).
Dr. David King Boison, Senior Research Fellow at CIMAG, stated that if African countries continued to use the dollar and the pounds as their international currency, it would be very difficult to achieve the aims of the AfCFTA as currencies were not only for trading but also for communicating and speaking in a language that is common to the economic community.
Dr. Boison explained that to achieve the objectives of the AfCFTA, which include the promotion of intra-trade among African countries and enhancing the competitiveness of the economies of the states within the continent and the global market, the use of European currencies would erode such aims.
He indicated that even though Africa was a continent rich in natural resources and cultural diversity, it had faced significant economic challenges over the past two decades, adding that one of the critical issues undermining its economic stability was currency volatility.
He said this when he, together with Mr. Albert Derrick Fiatu, the Executive Director of CIMAG, and other officers, interacted with the executive of the Ghana Journalist Association, Tema Region, on the prospects to equip media practitioners with artificial intelligence skills to enhance their reportage and project African issues.
Dr. Boison, who is also a consultant to the Vanuatu Trades Commission to Ghana, stated for instance that the statistics from the Bank of Ghana showed that the Ghanaian cedi depreciated from an average of GHS 0.87 to USD 1 in 2003 to about GHS 12.50 to USD 1 by 2023, representing a depreciation of approximately 1,334 percent over two decades, adding that similarly, the Nigerian naira fell from NGN 129 to USD 1 in 2003 to around NGN 760 to USD 1 in 2023, marking a depreciation of over 490 percent.
He explained that these fluctuations had profoundly impacted inflation rates, foreign debt, and overall economic growth, stating that currency stability was essential for fostering a conducive environment for investment, trade, and sustainable economic development.
Dr. Boison said: “Persistent devaluation of African currencies has led to inflationary pressures, increased cost of imports, and reduced purchasing power for the general populace. For instance, Ghana experienced an inflation rate averaging around 14.72% from 2003 to 2023 (Statista, 2024), while Nigeria saw an average inflation rate of 12.9% over the same period (Statista, 2024).”
The CIMAG senior research fellow lamented that the economic instabilities had exacerbated poverty, unemployment, and economic inequality across the continent as depreciations of African currencies affect purchasing power and increase the cost of living and contribute significantly to economic instability, noting however that the AKL Lumi emerged as a potential solution to unify and stabilise African economies.
“The AKL Lumi, introduced by the African Diaspora Central Bank, aims to reduce reliance on foreign currencies, promote intra-African trade, and enhance economic sovereignty. By introducing a common currency, Africa could potentially mitigate the adverse effects of currency volatility and create a more stable economic environment conducive to growth and development.”
On the potential of the AKL Lumi to stabilise economies on the African continent, he said the currency, which is backed by renewable energy and gold, presented a unique opportunity to stabilise African economies through Diaspora Direct Investment (DDI), emphasising that, unlike other currencies, the AKL Lumi is not introduced to compete but rather to provide economic stability and enhance financial sovereignty in Africa.
Mr. Fiatui, the CIMAG Executive Director, reiterated the importance of companies, especially small and medium enterprises, to take advantage of the opportunities being offered by the African Diaspora for interest-free loans for expansion of their activities and creation of employment for the youth.
GNA