Africa’s growth must be by local and robust capital markets

anchored on an African currency like Ghana Cedis which has favourable exchange rate to the US dollar. However, Ghana’s lending capacity is shunted because the terms and conditions are choking.

To unleash the Cedi’s power as the preferred currency, the Ghanaian Parliament must embark on regulations to effect that. If not for the Reagan administration passing of the Usury laws, which lowered lending rates for capital and real estate projects, the US economy would never have popped.

Given the Cedis’ favourable exchange rate to the dollar, there should be weighted average on interest rates charged by five top economies as a basis of what one should expect.

But when the Bank of Ghana pays double digits on its Treasury notes, then, the cost of money is piled up on that. That cost is choking robust economic development. Africa’s insatiable appetite to seek foreign lends for local projects puts pressure on their foreign reserves.

Were the Cedis to become preferred currency for ECOWAS with special drawing rights for certain countries in the region, the region will have alternative currency and begin to shun the dollar, pounds and euro.

Note, such a bold pronouncement will unleash foul from Western institutions and nations with call for political sanctions. Call off their bluff and remind them President Richard Nixon pulling the US out of the bullion standard set the US dollar on course to be preferred global currency. The US dollar is not God sent but printed but backed by good faith of the US. Any country can “copy and paste” such a move but they may lack WILL to past because of intimidation.

African growth through FIREL not the World Bank or International Finance Corporation guidelines as these institutions have no relevance in economic development, except to confuse and deceive marginal nations to come to them for prescription, will significantly change the trajectory for positive outcome.

The World Bank’s annual lending capacity is less than $75bn for nearly 100 nations they shadow. Therefore, it is unlikely any nation will get $1bn facility from them.

The “drop-in-the-desert” amounts they lend to African nations will not lead to the desert getting wet to fertilise growing needs. The Bank of America alone lends more than $1bn daily for various investments and capital projects in the US.

Africa will never emerge looking up and depending on the World Bank and in-tow the IFC.

Challenge me on that.

E.E. Okpa, Texas, United States