Nairobi. Africa’s development bank is proposing a new ‘gold standard’ style currency arrangement backed by critical minerals such as cobalt, copper, lithium, manganese and some of the ‘rare earths’ key to the world’s energy transition and electric vehicles.
The 54-nation region, which has about 30 percent of the world’s critical minerals reserves, attracts only 3 percent of global energy investments each year and only 2 percent or $40 billion, of worldwide green investments last year, the African Development Bank said.
This is partly as a result of the continent’s volatile currency markets, said the AfDB, which is proposing a new “non circulating” currency called African Units of Account (AUA) which would be underpinned by critical mineral reserves.
Africa itself needs to double its clean energy investments to an average of $200 billion a year to both cut carbon emissions and boost vital electricity production.
Under the AfDB plan, countries would pool a pre-agreed amount of their proven critical mineral reserves and local currencies could then be converted at an agreed rate.
“The idea borrows from the Gold Standard that anchored global currency stability,” the AfDB said in a new report, without giving a timeline for introducing the currency.
The Abidjan-based development bank first floated the idea last year, but this is the first time it has laid out details.
“It further builds on the CFA-Euro peg in Francophone countries, which is backed by a pledge of external reserves,” the AfDB said, adding that a basket of critical commodities would hold its value “better than any African currency”.
There have been moves by emerging market countries to find ways of navigating the risks posed by their dependence on the dollar for trade and other transactions.
US President Donald Trump threatened on Thursday to impose 100 percent tariffs against BRICS nations if they moved to replace the dollar as their reserve currency.
The AfDB argued that the proposed new currency could help African governments attract international money into green energy projects as it would “mitigate the currency and convertibility risks”.
Revenues generated by the sale of electricity in local currencies would be paid to a designated settlement agent, which will then sell the equivalent amount of minerals to generate dollars to pay off any lenders into energy development projects.
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Tanzania: Samia Hands Over NBC’s 354m/ – Crop Insurance Compensation to Farmers Affected By Hailstorms
President Samia Suluhu Hassan, has handed over a cheque of 354m/- from the National Bank of Commerce (NBC) as compensation to tobacco farmers, who were affected by hailstorms during the previous farming season in various regions across the country.
Handing over the cheque in Dodoma, the compensation is part of the crop insurance service provided by NBC in collaboration with the National Insurance Corporation (NIC).
Furthermore, President Samia has also handed over health insurance coverage to members of the Lindi Mwambao Cooperative Union based in Lindi Region, through the Farmers’ Health Insurance service provided by the bank in partnership with Assurance Insurance Company.
While visiting the bank’s pavilion at the Nanenane Agricultural Exhibition and being received and briefed by the bank’s Managing Director, Mr. Theobald Sabi, she said: “This crop insurance is one of the crucial solutions in ensuring farmers have a reliable income, without fear of challenges such as natural disasters, including hailstorms.
“I call upon all farmers in the country to make the best use of this important opportunity by accessing these kinds of insurance services. I also highly commend NBC and all the stakeholders participating in this programme.”
Elaborating further on the crop insurance service, the Minister of Agriculture, Hussein Bashe, stated that it will help to recover the loss farmers incurred, especially in various calamities beyond their control.
Citing them as floods, fires, and hailstorms, which have significantly affected the well-being of farmers and caused some to be reluctant to invest in the crucial sector, Mr Bashe added: “However, our President, this step by NBC is just the beginning, as this is the second year since they started offering this service, and the results are already visible.
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“As the government, we promise to continue supporting the wider implementation of this service, with the goal of ensuring that this crop insurance service reaches more farmers.”
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On his part, Mr Sabi said that the farmers who benefited from the compensations are from 23 primary cooperative unions in the regions of Shinyanga, Geita, Tabora, Mbeya, Katavi, and Kigoma.
He added: “In addition to these insurance services, as a bank, through this exhibition, we have continued with our programme of providing financial education and various banking opportunities to farmers, alongside offering them various loans, including loans for agricultural equipment, particularly tractors, to eligible farmers.:
At the NBC booth, President Samia also had the opportunity to be briefed on the various services offered by the bank to the farmers namely crop insurance and health insurance services.
There, the President had the chance to speak with some of the beneficiaries of the services, including the Vice-Chairman of the Lindi Mwambao Primary Cooperative Union, Mr. Hassan Mnumbe, whose union has been provided with a health insurance card from the bank.
Source: allafrica.com
