Academic journal article African Studies Review

The Monetary Geography of Africa

Academic journal article African Studies Review

The Monetary Geography of Africa

Article excerpt

Paul R. Masson and Catherine Pattillo. The Monetary Geography of Africa. Washington, D.C.: Brookings Institute Press, 2004. xix + 217 pp. Graphics. Appendixes. Notes. Index. Cloth. $39.95

In this insightful, thorough, extensively documented, and well-researched work, the reader is led to investigate the feasibility of a common African currency and encounters the geography of the continent-not in the usual sense of space, place, and ecology, but in the financial senses of deterritorialization and regional currency areas. As the authors indicate in the preface, "This book describes the present use of currencies in Africa as well as their use in the recent past and attempts to draw conclusions concerning the evolution of exchange rate regimes in the future" (xiii). The ultimate question addressed is, can a common currency bring benefit to Africa?

The context is one of globalization, with Africa existing in poverty on the margins of the world's economy. Most African currencies have been sharply devalued; the terms-of-trade are deteriorating; corruption, kleptocracy, and strife dominate; seigniorage prevails; and there is financial inefficiency and political interference in the currencies of most countries. Meanwhile, the EU provides a positive image of potential benefits, and there have already been several subcontinental monetary groupings, such as the long-standing CFA franc zone and the Common Monetary Area of southern Africa. The significance of the currency issue was underlined by a major article, complete with colorful cover, in a recent issue of the IMF magazine, Finance and Development (December 2004). The article's subtitle says "probably no" to the possibility of a common currency, while this book indicates serious questions regarding its feasibility. The driving force of a common currency, The Monetary Geography of Africa suggests, is more political (read: the cooperative move out of poverty, debt, and underdevelopment) than economic, and a common monetary union must therefore be preceded by regional groupings and their eventual integration. …

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