Adoption of a Digital Currency Towards a Singular Continental Market: A Catalyst for African Economic Integration and Revolutionising Pan-African Trade Payment Systems

With the proliferation of digital currencies and decentralised technologies, there is growing interest in their potential to foster regional integration and facilitate cross-boundary trade. African states, recognising this potential, are exploring the creation of Central Bank Digital Currencies (CBDCs) to harness the advantages of decentralised technology while maintaining regulatory oversight. The inherent nature of CBDCs makes them particularly suited to address long-standing challenges in cross-border payments and financial inclusion across the continent. In 2019, the African Union (AU) signed the African Continental Free Trade Area (AfCFTA) agreement, a historic step towards regional integration, creating a single market encompassing 54 countries. The AfCFTA's phased implementation aims to culminate in a unified market with a singular continental currency, aligning with the AU's Agenda 2063 vision. This goal of a unified currency has been a recurring aspiration for the AU, underpinned by the Optimal Currency Area (OCA) theory of integration. However, the realisation of a traditional common currency faces significant hurdles due to diverse economic structures and policy frameworks across African nations. This thesis proposes that the adoption of a Pan-African CBDC by the AU could effectively address these challenges, facilitating cross-border transactions while sidestepping third-party intermediaries. The issuance of a Pan-African CBDC has the potential to leapfrog the continent towards a more competitive global economy, significantly boost intra-African trade, and accelerate the economic integration of the continent. This research contends that a continental digital currency can serve as a catalyst for integration, potentially transcending the limitations of traditional OCA theory in the African context. By enabling seamless, cost-effective cross-boundary payments, a Pan-African CBDC could unlock the full potential of the AfCFTA, fostering increased intra-African trade and driving progress towards the AU's vision of an economically integrated and developed Africa by 2063.

Grantor dc:publisher.institution

University of Bradford

Author dc:creator

• Koroye, Tamarakemiebi

Advisors dc:contributor.advisor

• Kapsis, Ilias
• Olokotor, Prince N.C.
• Wan Rosli, Wan Rosalili

• African Continental Free Trade Area (AfCFTA)
• Monetary integration
• Central Bank digital currencies (CBDCs)
• African Central Bank
• Optimal currency area (OCA) theory of integration
• Digital currencies
• African trade
• Regulation
• African Union (AU)

Statement dc:rights

• <a rel="license" href="http://creativecommons.org/licenses/by-nc-nd/3.0/"><img alt="Creative Commons License" style="border-width:0" src="http://i.creativecommons.org/l/by-nc-nd/3.0/88x31.png" /></a><br />The University of Bradford theses are licenced under a <a rel="license" href="http://creativecommons.org/licenses/by-nc-nd/3.0/">Creative Commons Licence</a>.

Language dc:language.iso

en

Repository record dc:identifier.uri

https://bradscholars.brad.ac.uk/handle/10454/20940

OAI identifier oai:identifier

oai:bradscholars.brad.ac.uk:10454/20940