ABSTRACT
This chapter assesses relevant monetary policies to a successful implementation of the AfCFTA. It first considers the practicality of a common currency in Africa, contrasting the potential trade benefits of a currency union against the monetary policy constraints imposed by currently unsynchronized business cycles across the continent. While a common currency could significantly boost intra-Africa trade, African nations would, at the minimum, need to diversify their economies to ensure that centralized monetary policy by a supranational central bank—as entailed by a common currency—does not overwhelm those potential trade benefits, which is not yet the case. Moreover, the chapter advocates for broader policy coordination among member states.
