The Monetary Geography of Africa

This book describes the present use of currencies in Africa as well as their use in the recent past and attempts to draw conclusions concerning the evolution of exchange rate regimes in the future. Before getting into the substance, two questions need to be answered: what is the meaning of monetary geography, and why is it an interesting topic for Africa? We have adapted the term monetary geography from the title of a book published by Benjamin Cohen in 1998, The Geography of Money. In that book, Cohen argues forcefully that money has become “deterritorialized,” that is, the circulation of a particular money is no longer coterminous with the country of issue. A prime case in point is the creation of the euro, which is not associated with a single country but rather with a supranational central bank. In addition, foreign currencies circulate widely in many developing countries because of uncertainty about the ability of the domestic currency to maintain its value. Thus in this book we are concerned with the use of money, whether within the issuing country’s borders or outside of them. We are especially interested in the potential spread of regional currency areas. In keeping with the geographical notion, we will rely on maps to convey some of the key data not only on the use of moneys but also on the economic variables that influence their use and determine their value.