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Africa's Gold Strategy: Path to Sovereignty, Global Economic Stability, Experts Believe

Sputnik Africa

African nations are increasing their gold reserves to shield their economies from global instability. The World Gold Council predicts around 20 central banks... 04.08.2024, Sputnik Africa

2024-08-04T19:14+0200

2024-08-05T13:07+0200

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Africa is strengthening its financial position, and in doing so, it is undermining Western influence. By backing their currency with gold, they contribute to the weakening of Western currencies, Professor Joseph Chisasa from the University of South Africa told Sputnik Africa.The professor went on to explain that Africa's heavy dependence on the US dollar subjugates its economies to American interests, emphasizing the need for a shift away from this reliance.Gold is a valuable commodity prized for its wide acceptability as a medium of exchange and as a store of value. It offers stability in terms of its value. Meanwhile, the West, particularly the Americans, advocate for the continued dominance of the US dollar as the transactional currency due to the stability it has maintained over centuries, the scholar argued.Additionally, it poses a threat to territorial integrity. The US is essentially "bullying other nations," and this is something we cannot allow to happen, the professor added.Professor Ebenezer Bugri Anarfo from the Ghana Institute of Management and Public Administration agreed with his South African colleague, saying that African nations are taking measures to lessen their dependence on the US dollar, which has been causing significant economic instability across Africa as their local currencies are often weak and depreciate in value when it comes to conducting business with international partners, which often requires the use of the dollar.Furthermore, Africa's focus on accumulating gold will lower their importation costs and effectively reduce the real value of their debt denominated in US dollars, according to Anarfo.

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Africa's Gold Strategy: Path to Sovereignty, Global Economic Stability, Experts Believe

19:14 04.08.2024 (Updated: 13:07 05.08.2024)

Production of gold bars at the Krastsvetmet. - Sputnik Africa, 1920, 04.08.2024

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African nations are increasing their gold reserves to shield their economies from global instability. The World Gold Council predicts around 20 central banks will boost their gold reserves next year, including South Sudan, Uganda, Nigeria, Madagascar, Tanzania, and Zimbabwe.

“I think that if we achieve that, that will probably stabilize the global economy, because we will not have a single state […] that becomes the most powerful of all and arm-twist other nations,” he said.

The professor went on to explain that Africa's heavy dependence on the US dollar subjugates its economies to American interests, emphasizing the need for a shift away from this reliance.

“The more the gold reserves that we accumulate, the more independence we have from American imperialism,” Chisasa highlighted.

Gold is a valuable commodity prized for its wide acceptability as a medium of exchange and as a store of value. It offers stability in terms of its value. Meanwhile, the West, particularly the Americans, advocate for the continued dominance of the US dollar as the transactional currency due to the stability it has maintained over centuries, the scholar argued.

“I think that the weaponization of the US dollar, in my view, is simply a selfish position by the Americans and taking advantage of the fact that the globe has ideally accepted the dollar as a transactional currency. They're in denial of the fact that the world is not static and that there are innovations that come up with advancements in technology, including financial technology [...]. And so I find it strange and irresponsible for the American dollar to be used as a weapon against advancements that are taking place in financial technology and monetary systems [...],” Chisasa pondered.

Additionally, it poses a threat to territorial integrity. The US is essentially "bullying other nations," and this is something we cannot allow to happen, the professor added.

A man display U.S. $100 bills alongside Nigerian currency at the craft and art market in Lagos, Nigeria, on Wednesday, Aug. 16, 2023. - Sputnik Africa, 1920, 17.07.2024

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Professor Ebenezer Bugri Anarfo from the Ghana Institute of Management and Public Administration agreed with his South African colleague, saying that African nations are taking measures to lessen their dependence on the US dollar, which has been causing significant economic instability across Africa as their local currencies are often weak and depreciate in value when it comes to conducting business with international partners, which often requires the use of the dollar.

Furthermore, Africa's focus on accumulating gold will lower their importation costs and effectively reduce the real value of their debt denominated in US dollars, according to Anarfo.

“The recommendation is that they should continue to pursue the idea of increasing their gold reserves as another form of investing or storing their wealth instead of the US dollar. This is very key. They should diversify their portfolios to reduce the amount of dollar assets that they hold in order to mitigate the dollar, reducing, or depreciating or devaluing against other currencies we have in sub-Saharan Africa,” he concluded.