African geography africa is the worlds second largest continent and also the second most populated country in the world. Invest in senegal a competitive investment destination in. Second, it expands the existing literature on the monetary geography of africa. Monetary policy remains in a tightening cycle, although this is subject to data outcomes.
The central african economic and monetary community cemac was created in 1994 and became operational after the treatys ratification in 1999. Apr 06, 2020 subsaharan africa regional economic outlook. The international monetary fund and the world bank were created in 1944 at a conference in bretton woods, new hampshire, and are now based in washington, dc. Social affairs globalization and development in subsaharan. Disadvantages of imf the international monetary fund 1. Malawi, a landlocked country in southeastern africa. Central african economic and monetary community cemac. Specifically, the existence of fiscal dominance, a persistent liquidity overhang, an. Africas economic growth page 1 of 27 executive summary over the past 15 years, most countries in africa experienced sustained economic growth, with growth rates often exceeding 5% per year. Definitions and measures of poverty development initiatives. The imf also has an international monetary and financial committee of 24 representatives of the membercountries that.
The monetary geography of africa catherine pattillo and paul r. Africa is a continent that is very rich in mineral resources. The advantages of a common currency include lower transaction costs, increased stability, and greater insulation of central banks from pressures to provide monetary financing. Overall, the socioeconomic and political milieu, including the legal framework under which the central bank of nigeria has operated, was found to be the critical factor that influenced the outcome of monetary policy. Can the european union be a model for african nations. African currency had been mooted as a goal of the organization for.
Africa is working toward the goal of creating a common currency that would serve as a symbol of african unity. Among the 50 independent african countries there are vast population differences. Africa is a continent especially afflicted by this trend. Growth momentum in subsaharan africa remains fragile, marking a break from the rapid expansion witnessed since the turn of the millennium. Regional integration and monetary unions in africa. N37,n47,o55 abstract in this paper we evaluate the impact of colonialism on development in subsaharan africa. Monetary policy is the policy adopted by the monetary authority of a country that controls either the interest rate payable on very shortterm borrowing or the money supply, often targeting inflation or the interest rate to ensure price stability and general trust in the currency unlike fiscal policy, which relies on taxation, government spending, and government borrowing, as tools for a. Since apartheid ended in the 1990s, south africa s economy and status in the world have dramatically increased and will soon match the beauty of its geography. The international monetary fund is an international organization that aims to promote global economic growth and financial stability, to encourage international.
The monetary geography of africa pdf free download. A poverty line is determined using monetary and nonmonetary indicators. The main objective of the central african economic and monetary community cemac is to promote the harmonious development of the member states in the context of the establishment of a true cemac common market free movement of persons, goods, capitals, and services by establishing an economic and monetary union. They apply lessons from both experience and theory that lead to a number of conclusions. The imf was originally designed to promote international economic cooperation and provide its member countries with short term loans so they could trade with other countries achieve. We have adapted the term monetary geography from the title of a book by benjamin cohen.
International monetary fund, april 2015 publication orders may be placed online, by fax, or through the mail. The monetary geography of africa by paul masson and catherine. In the monetary geography of africa, paul masson and catherine pattillo analyze the current situation and prospects for further integration. On the adequacy of monetary arrangements in subsaharan africa.
However, these papers generally look at the exante conditions for optimality, leaving the issue of endogeneity. The absence of deep, efficient financial markets seriously challenges policy making, hinders poverty alleviation, and constrains growth. African countries united nations economic commission for africa. In particular, it examines existing monetary unions, assessing their viability and the scope for expanding them, and also considers proposed new monetary unions. Indeed a great moderation as the improvement in economic. Where monetary indicators are used eg the monetary value of the basic consumption basket, two issues arise. The tighter policy stance of the bsl has led to tight liquidity. The executive board, in turn, is run by the managing director, who is elected for renewable fiveyear terms.
The euro zone and both of the cfa franc zones would be examples of full monetary union. South africa history, capital, flag, map, population. The monetary geography of africa by paul masson and catherine pattillo. International monetary fund, publication services p. May 22, 2018 using a progressive approach derived from the international monetary funds extensive practice and research, monetary policy in subsaharan africa seeks to address what we know about the empirics of monetary transmission in lowincome countries, how monetary policy can work in countries characterized by underdeveloped financial markets and. This article examines the extent to which political variables affect budget deficits, money growth and inflation in subsaharan africa ssa. The monetary geography of africa article pdf available in foreign affairs council on foreign relations 846 january 2005 with 448 reads how we measure reads. South africa, the southernmost country on the african continent, renowned for its varied topography, great natural beauty, and cultural diversity, all of which have made the country a favored destination for travelers since the legal ending of apartheid afrikaans. This chapter examines monetary policy in subsaharan africa ssa.
Recent growth has been due to growth in sales in commodities, services, and manufacturing. West africa, east africa, central africa and southern africa in particular, are. A poverty line is determined using monetary and non monetary indicators. For example, the west african economic and monetary union uemoa has 8 countries using the cfa franc, previously pegged to the french franc and now to the euro. A model is presented that quantifies the benefits of monetary union membership.
Monetary policy is the policy adopted by the monetary authority of a country that controls either the interest rate payable on very shortterm borrowing or the money supply, often targeting inflation or the interest rate to ensure price stability and general trust in the currency. Monetary policy issues in subsaharan africa oxford. Post keynesian monetary theory and its implications for monetary policy in south africa by michael keith caul ton jackson submitted in fulfilment of the requirements for the degree of master of arts in the subject of economics at the university of south africa supervisor. This chapter considers whether the monetary geography of africathat is, the pattern of currency useis likely to change in coming decades. Economic and political criteria for currency unions or the adoption of another currency iv. Colonialism and economic development in africa leander heldring and james a. Considering the international monetary fund and world bank.
The population of africa is over 900 million people making up 14% of the planets population. Xisting monetary arrangements in subsaharan africa are the result of different choices made after the colonial era. South africas remotenessit lies thousands of miles distant from major african cities such as lagos and cairo and more than 6,000 miles 10,000 km away from most of europe, north america, and eastern asia, where its major trading partners are locatedhelped reinforce the official system of apartheid for a large part of the 20th century. Population growth in africa for the period 19802065 5 figure 2. A full monetary union involves a single currency and central bank. Africa has a long history of some countries sharing single currencies.
Using a progressive approach derived from the international monetary funds extensive practice and research, monetary policy in subsaharan africa seeks to address what we know about the empirics of monetary transmission in lowincome countries, how monetary policy can work in countries characterized by underdeveloped financial markets and. Using the arellanobond dynamic panel data analysis on 36 ssa countries from 1980 to 2010, we first characterise the impact of presidential elections on two policy variables. Social affairs globalization and development in sub. It then looks at the peculiar challenges of characterizing the monetary transmission mechanism. The role of the structural adjustment program in africas.
Towards a common currency in the eastern african communityeac. As a general rule, former british colonies moved from their currency boards to. Changes, over time to this monetary value hence frequent adjustments to. In africa, the cma is an example, since the currencies of lesotho, namibia, and swaziland are linked one for one with the south african rand. Regional economic communities in africa aim to establish monetary unions as part of their broader integration agenda.
Senegals monetary policy mirrors the objectives of economic stability and growth. Table of contents preface acknowledgements list of abbreviations and acronyms i. It is defined by the regional central bank, the bceao, with the aim of reducing. Comparative analysis of structural adjustment programs in africa with emphasis on agriculture and trade, regional trade agenda series. Masson, paul and patillo 2004, the monetary geography of africa.
However, even with these riches, it is a very poor continent, relatively speaking. Changes, over time to this monetary value hence frequent adjustments to the value of the poverty line 2. The imf and the world bank in africa conditionality, impact and alternatives edited by seminar proceedings no 18. The monetary geography of africa by paul masson and. This book describes the use of moneys in africa, currently and in the recent past, and attempts to draw conclusions concerning the evolution of exchange rate regimes in the future. Monetary unions and regional trade in africa unctad.
Indeed, there are several papers that study whether or not specific african regions are oca. Literature over the last ten years the south african economy has experienced a remarkable period of economic stability coupled, since 1999, with the longest business cycle expansion in the countrys history. Regional integration and monetary unions in africa united. Towards a common currency in the east african communityeac. More african countries are members of monetary areas than have a pegged exchange rate. Wohlwend introduction multinational lenders subsaharan africa is a place of unequivocal beauty, diversity and history.
Since the beginning of decolonization some fifty years ago, african nations have suffered setbacks preventing them from enjoying the benefits of economic development. Top 10 contributors to population increase in africa 19802015 6 figure 3. Oct 17, 2003 the monetary geography of africa catherine pattillo and paul r. Financial sectors in lowincome subsaharan africa ssa are among the worlds least developed. Monetary policy remained tight throughout 2017 as the bsl raised the monetary policy rate mpr on four consecutive occasions, in march, june, september, and december, respectively, to contain inflationary pressures. After a brief historical overview of changes in ssas monetary policy landscape from the 1980s, the article considers a range of issues related to monetary policy among central banks operating independent currencies in the region. The top 10 countries that are contributing to the increase are. This has inspired much optimism about the regions prospects to finally leave poverty and underdevelopment behind. The economy of africa consists of the trade, industry, agriculture, and human resources of the continent. Urban and rural population of african countries 19802050 7 figure 4. Africas population has nearly trebled from its estimated 478 million in 1980 to the current estimate of close to 1. Political influence on fiscal and monetary policy in sub. This paper discusses the evolution of monetary policy in nigeria in the past four decades. This has inspired much optimism about the regions prospects to.
Fiscal policy and economic growth in south africa article pdf available in journal of economic studies 6025 september 2011 with 14,646 reads how we measure reads. In the world context, colonialism had very heterogeneous effects, operating through many. Trends in net reproduction rate by region of africa 9. However, these papers generally look at the exante conditions for optimality, leaving the issue of. Pdf fiscal policy and economic growth in south africa.
Unlike fiscal policy which relies on government to spend its way. Lending effectiveness in subsaharan africa by daniela a. Lake nyasa, known in malawi as lake malawi, accounts for more than onefifth of the countrys total area. Monetary policy issues in subsaharan africa oxford handbooks. Africa s economic growth page 1 of 27 executive summary over the past 15 years, most countries in africa experienced sustained economic growth, with growth rates often exceeding 5% per year. In fact, assets in most lowincome african countries are smaller than those held by a single mediumsized bank in an industrial country. On the adequacy of monetary arrangements in subsaharan. The choice and design of exchange rate regimes bis.
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