South Africa’s Central Bank governor Lesetja Kganyago has stated that adopting an African currency is unlikely to succeed as it is difficult to attain ‘macroeconomic convergence’. Kganyago said it would require similar levels of inflation, debt, consistent fiscal policies and banking rules among nations on the continent. “Absent those, it’s impossible,” he said.
Kganyago also said plans by the leaders of the BRICS group of nations which comprises Brazil, Russia, India, China and South Africa to have a common currency would require a fiscal union such as the European Union.
“If the BRICS political leaders say that is where they are going... you’ll have to get a fiscal union, you’ve got to get macro-economic convergence,” Kganyago said. “And importantly, you need a disciplining mechanism for countries that fall out of line with it. And the euro project demonstrated just that.”
Source: zawya.com