In March 2022, South African International Relations and Cooperation Minister Naledi Pandor reaffirmed the commitment of her government to a continental monetary union, also known as a ‘common currency’. She said South Africa supports the creation of African monetary institutions – the African Central Bank, African Investment Bank and African Monetary Institute – as pillars of the common currency system that would be implemented. This move, she said, would support continental economic and trade integration, a process already embarked upon with the founding of the African Continental Free Trade Area (AfCFTA).

This trade brief attempts to cast light on the prospect of an African continental common currency by examining the inter-relationships of the types of economic integration arrangements and the economic rationale and potential pitfalls of a single currency. It also discusses the experiences of existing currency areas in Africa and gives an update on the progress towards monetary unification in the ECOWAS and EAC regional economic communities.

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