Go For Beijing Currency
WILL some economies of developing countries reach a milestone if they are not using Chinese yuan? Most of the African countries have known China during their liberation struggle era since she was a helping hand for many countries. Now that we are in a new era of economic struggle,we have to find a new way forward. And all things are of those powerful economies namely USA, China, United Arab Emirates, Saudi Arabia etc and small economies are always aligning themselves with those powerful economies.
One of the African countries that I urge to take the initiative in using the Chinese currency is Zimbabwe. In the middle of 2012 a number of Central African banks were given access to yuan-dominated bonds by the China Development Bank Corporation(CDB).
The CDB, the state-owned lender and a supporter of government projects and Chinese companies looking to expand overseas, set aside part of its three-year dim sum bonds sold recently for African Central banks. Central banks of Nigeria and Tanzania made the biggest purchase of the bonds among their African counterparts. I am also cautioning Zimbabwe not to use a lot of yuan until such a time that is it becomes commonplace in the global economy.
As for Namibia there is no need even to consider the yuan because we are enjoying the privileges attached to the South African Rand in global market. The other country I believe should take this initiative in using yuan is Zambia. China’s investment in Zambia is more than US$4 billion, chiefly in mining, and with increased Chinese interest in retail and other sectors, this figure is supposed to increase. China imports copper from Zambia, tobacco from Zimbabwe, gold from South Africa, diamonds from Sierra Leone etc.
There is strong belief that the US dollar will lose its supremacy on the Africa continent to the Chinese yuan. African countries are increasingly looking to alternative currencies besides US dollars. Angola has requested oil and gas companies to pay tax revenue and local contracts in Kwanza, its currency, rather than in US dollars. Mozambique wants companies to exchange half of their export earnings for Meticals, hoping to pull more of the wealth in vast coal and natural gas deposits into the domestic economy. Ghana is seeking similar ways to reinforce the primacy of domestic currency after the Cedi plummeted more than 17 percent against the dollar in the first six months of this year. The sternest steps come from Zambia, a copper-rich country in Southern Africa where the central bank has banned US dollar-denominated transactions.
And again for Namibia what we only need to do is to negotiate a fair deal with South Africa so that our Namibian dollar can also be legal tender in South Africa. As much as we have South African rands as legal tender here in Namibia, the same should be done for Namibian dollars in South Africa.The Botswana Pula seems not to affected much by dominant currencies, but again their situation is the same as Namibia. Botswana Pula with its strength is not legal tender in South Africa while Rands is a commonplace currency in Botswana domestic economy.
And the Namibian government must put in place strong laws which direct all the Asian business people to plough back into the community. They must save their money in local banks.The Asians, like any other foreign investors, must invest in the communities like building school, clinics etc.
Naftali Kambungu
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