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- Should African countries start printing their own money ?
Should African countries start printing their own money ?
I thought printing money was bad for any economy, this article from the Gazette news showed my a new of seeing it.
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I am not a fan of the concept of printing money to inject in an economy, never was because more money printed seems to do nothing but make it lose more of its value, but from this article I read helped me see that African context of printing money is different than most developed countries and it is necessary for countries like Botswana to print its own money.
Now I am going to summarize everything on this article here, it is a 12 minutes read but I want it to be 2 minutes for you to know what the newsletter was about so here:
Africa's Debt Dilemma: Borrow or Print?
Africa's reliance on borrowing raises a critical question: Does the continent need to continuously borrow for survival, creating debt burdens for future generations? The answer: “It depends.” Let’s break it down.
- Inflation and Money Printing: Conventional economics warns that printing money leads to inflation, as more money chases fewer goods. But what if money printing was used to boost innovation and production, not just demand?
- Borrowing vs. Printing: Many African countries borrow foreign currency (like the U.S. dollar) instead of printing and managing their own. This can lead to long-term debt and a loss of economic sovereignty. When borrowing, African nations repay not in the same currency but through resources and economic value.
- Managing Printed Money: Inflation isn't caused simply by printing money, but by how it’s managed. If a government prints money to fund local projects and strengthens local industries, it can avoid devaluation and inflation. Ethiopia’s strong local construction and banking systems serve as an example of this strategy.
- The Way Forward: While borrowing might seem like the easy route, it often comes with strings attached. For Africa to break the cycle, a unified approach is key, where countries prioritize self-reliance over dependency on external debt.
Africa’s financial future depends on a shift in strategy—from dependency on borrowing to effective money management.
If you want to read on the whole article here it is [the gazette news], let me know your thought if you have any regarding this, what do you think, should African countries start printing their own money? If they do, how will this be received by the developed world?