The African Development Bank Proposes a New Currency Backed by Critical Minerals
The African Development Bank (AfDB) has put forward a groundbreaking proposal for a new currency system that would be supported by Africa’s abundant reserves of critical minerals. These minerals, including cobalt, copper, lithium, and manganese, are essential components in the production of renewable energy technologies. Despite holding approximately 30% of the world’s critical mineral reserves, Africa currently receives only a small share of global investments in energy and green initiatives.
To address this imbalance, the AfDB is suggesting the creation of a unique currency known as African Units of Account (AUA). Unlike traditional currencies, the AUA will not be circulated among the public but instead will be pegged to a collective pool of critical minerals. Each African country will contribute a predetermined amount of its proven mineral reserves to support the currency. In return, participating nations will have their local currencies exchanged at a specified rate based on their mineral contributions.
One of the key features of this proposal is the establishment of a designated settlement agent who will manage the revenues generated from local electricity sales. These funds will be used to purchase the equivalent value of minerals in dollars, which will then be utilized to repay the investments attracted by the initiative. By linking the AUA to critical minerals, the AfDB aims to incentivize sustainable development and increase Africa’s share of global green investments.
For more information, you can read the original article on Reuters.
