By Philip TAKYI (Dr)
The Nilar is a gold-based currency system designed to stabilize African economies by providing a more reliable and integrated financial infrastructure.
Gold has long been a symbol of wealth and stability, and its use in currency systems offers significant advantages, especially for nations prone to inflation, economic volatility, and fluctuating exchange rates.
In Africa, countries have faced considerable challenges regarding the stability of their national currencies, and a unified gold-based currency could serve as a solution to foster stronger economic ties, stimulate growth, and reduce vulnerability to external financial pressures.
The Nilar is more than a currency system; it is a transformative economic model for fostering a unified and prosperous Africa. Named after the iconic Nile River, the Nilar honors Africa’s and the world’s most iconic river, along which some of the earliest kingdoms and civilizations flourished. Just as the Nile nurtures life and growth across borders, the Nilar can foster a new reality of integrated, stable, and thriving African economies.
Many African countries suffer from high inflation rates, weak national currencies, and a dependence on fluctuating commodity prices, which make their economies unstable. For instance, Zimbabwe experienced hyperinflation in the 2000s, with inflation rates reaching as high as 89.7 sextillion percent in November 2008 (Hanke & Kwok, 2009).
The Zimbabwean dollar lost all value, prompting the country to abandon its currency in favor of foreign currencies, such as the U.S. dollar. Similarly, the Nigerian Naira has faced devaluation and inflation due to oil price volatility, which significantly impacts the nation’s economy (IMF, 2020).
These examples demonstrate how African economies can become susceptible to external economic shocks, leading to a loss of confidence in the local currency. The introduction of a gold-backed currency system, like the Nilar, would reduce reliance on volatile currencies and offer African nations a more stable alternative.
The Niler Economic Model
The Nilar represents a bold and transformative vision for Africa’s economic independence and prosperity. In a continent with a rich history of exploitation and external interference, the Nilar model calls for African policymakers to take charge of their economic futures by prioritizing stability, integration, and prosperity.
This economic framework advocates for the abandonment of Western statist models that have often led to dependency, underdevelopment, and inequality. Instead, it champions a homegrown, decentralized, and people-centered approach, where African countries collaborate within their own contexts to achieve sustainable growth.
Reassessing Western Statist Models
Western economic frameworks have long dominated global discourse, especially those rooted in neoliberal policies and centralized state control. African countries, since the end of colonialism, have frequently adopted these frameworks, often with limited success.
For instance, the Structural Adjustment Programs (SAPs) imposed by the International Monetary Fund (IMF) and the World Bank in the 1980s and 1990s across countries like Nigeria and Zambia resulted in drastic cuts to social spending, leading to increased poverty and inequality (Nnadozie, 2003).
These policies typically prioritize debt repayment, trade liberalization, and privatization, sometimes at the expense of national welfare.
Nigeria’s experience with SAPs is a prime example of the detrimental effects of such Western economic models. The Nigerian government adopted the SAP in 1986 under the pressure of international financial institutions, leading to severe devaluation of the naira, high inflation, and rising unemployment.
These measures were intended to open the economy to global markets, but instead exacerbated poverty and led to social unrest (Olukoshi, 1993). Such outcomes highlight the risks of relying on external economic prescriptions that do not align with the realities and priorities of African countries.
The Nilar: An African-Centered Economic Vision
In contrast, the Nilar (a concept rooted in African philosophy and practices) proposes a model that centers African values, economies, and governance structures. This model envisions robust economic integration within the continent, leveraging Africa’s human capital, natural resources, and traditional knowledge to build a self-sustaining economy.
By focusing on regional economic cooperation, the Nilar seeks to harness the collective strengths of African nations rather than depend on foreign aid or external interventions.
An example of a Nilar-inspired framework can be seen in the African Continental Free Trade Area (AfCFTA), launched in 2021. The AfCFTA aims to create a single market for goods and services across 54 African countries, boosting intra-Africa trade, which is currently underperforming compared to other regions globally. Intra-African trade is estimated to increase by 52% by 2022 (African Union, 2019). This represents a significant step toward reducing Africa’s dependence on external markets and creating internal economic interconnectivity.
Regional Integration: Harnessing Collective Strengths
One of the central tenets of the Nilar is regional integration, where African countries can form alliances based on shared economic, political, and cultural goals. A successful example of this can be seen in the East African Community (EAC).
The EAC’s efforts to enhance infrastructure, facilitate the free movement of goods, services, and people, and standardize trade regulations are crucial for fostering economic resilience in East Africa. The expansion of the Mombasa port in Kenya, a vital trade hub for the region, is one example of how regional integration has propelled growth in East Africa (Hassan & Kinyanjui, 2017).
By strengthening ties within the continent, countries are better positioned to negotiate favorable terms in international trade agreements. For instance, the partnership between South Africa and the rest of the Southern African Development Community (SADC) allows for joint bargaining with international trade partners, thus ensuring that Africa’s interests are safeguarded. These examples demonstrate how regional integration, a key aspect of the Nilar, can facilitate greater economic self-sufficiency.
Economic Decentralization: Fostering Local Enterprises
The Nilar also advocates for economic decentralization, where local communities are empowered to take charge of their economic affairs. This contrasts sharply with Western models of centralized control that often disregard local realities. Rwanda offers a noteworthy example of economic decentralization.
Under President Kagame’s leadership, the government has focused on decentralizing power to local authorities, giving them greater responsibility over their communities’ development. In areas such as health, education, and infrastructure, this has resulted in more localized, efficient governance and a reduction in poverty (World Bank, 2017).
Furthermore, the success of microfinance initiatives across countries like Kenya has demonstrated the power of localized economic empowerment. Programs such as M-Pesa, a mobile money transfer system, have revolutionized access to financial services in Kenya and across East Africa, particularly for rural communities and women.
By harnessing technology and decentralizing financial services, the Nilar model provides a pathway for African nations to empower their citizens and reduce economic inequalities.
Conclusion
The Nilar presents a bold, African-centered economic vision for the future. By rejecting Western models that often undermine national sovereignty and development, and instead promoting regional cooperation, decentralization, and self-reliance, African countries have the potential to foster greater economic independence and prosperity.
The examples of the AfCFTA, EAC, Rwanda’s decentralization, and M-Pesa illustrate how African nations are already laying the groundwork for a more prosperous and interconnected future. As policymakers continue to champion homegrown solutions, the Nilar could serve as the blueprint for African economic transformation.
The introduction of a gold-backed currency system, such as the Nilar, could provide African countries with much-needed economic stability and foster regional integration. By leveraging the value of gold, the Nilar could offer a more reliable alternative to the volatile currencies currently in use across many African countries. While challenges remain in implementing such a system, real-world examples from Africa demonstrate the potential benefits of a more unified and stable currency.
References
African Union. (2019). The African Continental Free Trade Area. African Union.
https://au.int/en/cfta
Hassan, I. A., & Kinyanjui, M. K. (2017). Regional integration and economic development in East Africa. Journal of African Economies, 26(4), 427-450. https://doi.org/10.1093/jae/ejw029
Nnadozie, E. (2003). Structural Adjustment Programs and Africa’s Development: A Reassessment. Africa Development, 28(3), 93-114.
Olukoshi, A. (1993). The African Crisis and the Adjustment Dilemma: Nigeria’s Experience with
the IMF and the World Bank. Journal of African Economies, 2(1), 34-60.
https://doi.org/10.1093/jae/2.1.34
World Bank. (2017). Rwanda: Economic Transformation and Decentralization. World Bank.
https://www.worldbank.org/en/country/rwanda
