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Home , African Central Bank, African Monetary Fund, African Monetary Union, African Union Commission

African Union Maitreya Marathe

MinuteMUN XIX March 13 - 15, 2020

UMass Amherst International Relations Club & Model United Nations Team University of Massachusetts Amherst

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Introduction

We will be simulating the (AU) a body of 55 African countries centered in . Formed in 2001, the AU works to make sure that all of the countries in are properly regulated, and make sure that each country is economically stable. The AU also aims to make sure that the standard of living for all peoples of Africa is continuously raised, and provides oversight for the development of each nation. This background guide is meant to introduce you to the problem and give you some ideas about the direction of this committee. This is a broad topic and I encourage delegates to seek further information.

I look forward to meeting all of you. Good Luck! - Maitreya

Statement of the Problem

Africa is a rapidly developing region that has seen enormous gains in recent decades. On top of this Africa is a resource rich continent with a population that is quickly joining the world middle class. As this development has occurred several states in the AU have called for the creation of a pan- that would bring the entire continent under a single currency. This would create one currency zone for the continent with the proposed name of the Afro or Afriq under an . This could be both an institution which promotes trade across Africa as well as creates a more stable and independent currency​.​ However,​ as seen in with the Eurozone, there can be downsides to a unified currency. Businesses can flock to high productivity countries from low productivity ones, and unified fiscal policy can create credit instability. Your task is to come to an agreement about what this monetary union should look like. There are many AU 2 things to consider in this topic: How will trade flow under this union? Should there be an accompanying trade union with the currency? Some have proposed that the currency be modeled after the mobile banking cryptocurrency that was used to solve the inflation in . There is also proposed online banking currencies from companies like Facebook. Africa has a rapidly growing number of Facebook users and the company is in the process of launching an online currency called the libra that could be used as a common currency. On top of this there are already two currency unions in Africa including the west African CFA Franc and central African CFA Franc which use a currency backed by the French national treasury. There are also several ongoing projects to create regional monetary trade unions in Africa. Including for members of the Economic Community of West African States (ECOWAS). The members of the have been working towards a monetary union, with the goal of adopting by 2024. To join the AU monetary union, they would have to abandon this project. The is not uniform and great consideration must be given to regional and national economic differences if the dream of an African monetary union is to be realized. This can be a complex topic and I suggest researching the economic state of your country and its position on the topic before the committee season.

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History

➢ Founded on May 26th 2001, the African Union was founded to replace the Organization of African Unity. AU 4

➢ From an original membership of 36 states when the OAU was established on 25 May 1963, there have been nineteen successive enlargements—the largest occurring on 18 July 1975 when four states joined. is the newest member state, having joined in January 2017. Morocco was a founding member of the OAU but withdrew in 1984 following the organization's acceptance of the Sahrawi Arab Democratic Republic as a member state. Morocco rules over most of the territory, but sovereignty is disputed. ➢ The work of the AU is implemented through several principal decision-making organs: - The Assembly of Heads of State and Government, the executive council, the Permanent Representatives Committee (PRC), Specialized Technical Committees (STCs), the Peace and Security Council and The . The AU structure promotes participation of African citizens and civil society through the Pan-African Parliament and the Economic, Social & Cultural Council (ECOSOC). ➢ The purpose of the committee is to formulate recommendations, resolutions and conventions for the African Union.

Topics that fall under the African Union: ● African Commission on Human and Peoples' Rights (ACHPR) ● African Court on Human and Peoples’ Rights (AfCHPR) ● AU Commission on International Law (AUCIL) ● African Committee of Experts on the Rights and Welfare of the Child ● Continental Financial Institutions (The African Central Bank, The and the )

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Venn Diagram of the Different governing regions and membership of the AU

Timeline

➢ 1945: The CFA Franc was introduced to the French colonies. ➢ 1975: The ECOWAS is founded, The Economic Community of West African States with the treaty of Lagos. ➢ 1986: CMA, , is founded creating a monetary Union of , , Swaziland around the ➢ 1992: The CMA becomes the MMA, Multilateral Monetary Area, and joins the Union. ➢ 2000: At a conference in Lome in the West African state of , the OAU heads of state sign the founding charter of the African Union (AU). AU 6

According to Section 30, governments that came to power in an unconstitutional way should be excluded from the organization. ➢ 2001: The OAU is now officially called the African Union and has 53 members. Morocco does not join the AU because of the ongoing conflict in Western Sahara. The OAU and the AU co-exist for a two-year transition period. The main organs of the African Union are the summit of the heads of state and the yearly rotating chair. The "African Economic Community" becomes part of the AU. ➢ 2003: The is proposed as a single currency for the ECOWAS states ➢ 2010: A common market was declared for the EAC, the East African Community, in Kampala ➢ 2013: The AU has 54 members - that is, all African countries except Morocco. Western Sahara is a full member of the AU but not a member of the UN nor an officially recognized state. Most of the AU members do not recognize Western Sahara as a state. The membership of the has been put on hold since a military coup took place in March 2013. Bissau and are also suspended. ➢ 2013: The EMAU, East African Monetary Union, protocol is adopted which laid the groundwork for achieving a single currency by 2023. ➢ 2015: The African Central Bank begins as an institution under the African Finance Regulatory Authority ➢ 2020: The ECOWAS single currency the Eco is expected to go into effect. ➢ 2020: The African Central Bank is expected to be completed. ➢ 2020: Facebook Libra is expected to be launched AU 7

Topics To Address

● Sustainable Development Economic development that is conducted without the depletion of natural resources. As well as ensuring that all development of infrastructure is economically and financially sound. ● Funding Practices Making sure that all funds are distributed appropriately and equally. Assuring that all agreed upon funds are being used for the respective purposes. Also covers the area of making sure there are indeed enough funds to finance any resolutions passed by the committee. ● Governance Structures Ensuring that there is a proper chain of command when it comes to implementation in any nation. An independent party that will oversee the implementation of any policy, and will be able to resolve any issues that may arise. Should something go wrong, the governance structures will be in charge of damage control. ● Stability Creating an equitable and stable monetary union which provides economic benefits to all countries ● Trade Promoting trade between countries and find a way to facilitate this without leaving some countries behind ● Unity Providing a union which can be encompassing for all nations beyond what they can form as regional blocks AU 8

Citations

1. https://cryptocurrencyfacts.com/ 2. https://www.buybitcoinworldwide.com/wallets/ 3. https://blockgeeks.com/guides/what-is-cryptocurrency/ 4. https://www.finder.com/what-is-cryptocurrency 5. https://securityintelligence.com/tag/cryptocurrency/ 6. https://www.cryptocompare.com/coins/guides/5-things-you-need-to-know -about-bitcoin-volatility/ 7. https://countingoncurrency.com/news-item/east-african-community-singl e-currency/ 8. https://www.uneca.org/publications/towards-common-currency-east-afric an-communityeac 9. https://www.dw.com/en/west-african-states-mired-in-controversy-over-ec o-currency/a-52045052 10. https://www.uneca.org/es-blog/regional-integration-and-monetary-unions- africa 11. https://www.eac.int/monetary-union 12. https://www.uneca.org/sites/default/files/images/eamu_report.pdf 13. https://databank.worldbank.org/reports.aspx?source=1228