The final currency option to be considered for the Southern Cameroons is to adopt the Naira as its currency. In order to do this the Southern Cameroons will have to sign a bilateral treaty with Nigeria to form an economic and monetary union. The bilateral treaty will guarantee free trade to facilitate the freedom of goods and people between the Federal Republic of Nigeria and the Southern Cameroons.
Although Nigeria is a member of Ecowas, there are countries within that regional grouping that have historically formed an inner monentary union of Francophone countries using the Franc Cfa as a common currency. It is quite possible that Nigeria and any other countries can also come together to form a separate monetary union while still belonging to Ecowas.
The implementation of the Naira Option will be very complex. The first thing that has to be done is that the Southern Cameroons must create its own currency (scamfric) as explained in option No 1 because the main goal is to demonetise the Fcfa and quit the Franc Zone.
The Southern Cameroons cannot enter into a treaty of economic and monetary union with Nigeria while it is still in the Franc Zone. It can only enter into such a treaty as an independent country with its own currency to start with.
Assuming the the process of creating its own currency is not blocked by LRC, BEAC or the French Treasury, it will put the scamfric into circulation as its national legal tender and use it for some years (2-4). This transition period will enable Nigeria and the southern Cameroons to see how the scamfric behaves against the Naira in cross border trade. The transition period will also enable the Southern Cameroons to evaluate the political and economic impact of of pulling out of the Franc Zone officially.
The Southern Cameroons have to deal with the impact of the possible repatriation of 1-3 million citizens of the Southern Cameroons who would be voluntarily or involuntarily repatriated from LRC back to the Southern Cameroons. The effect of the shutdown of the border with LRC, visa requirements and resident permit requirements for citizens of the Southern Cameroons in LRC have to be assessed.
All these transitional problems will enable the Southern Cameroons to understand how its own currency leads to political and economic isolation and underscore the need for the Southern Cameroons to open up towards Nigeria through a treaty of economic and monetary union. Let us call it the.”Nigercam Economic and Monetary Union” .
Since the goal of the Nigercam economic and monetary union is to enable the Southern Cameroons to adopt the Naira as its currency, the main features of this treaty will provide that the Central Bank of Nigeria will become the Central Bank of Nigeria and the southern Cameroons.
Secondly all banks operating in the Southern Cameroons will be subject to supervision by the Central Bank of Nigeria. The principles of deposit protection contained in the legislation creating the NDIC (Nigerian Deposit Insurance Corporation) will become law in the Southern Cameroons. The nomination of people to key banking positions in the Southern Cameroons will be subject to the approval of the Central Bank of Nigeria.
The southern Cameroons shall however have a reserve bank which shall be charged with managing the reserves of the Southern Cameroons.
The treaty will also provide for freedom of movement of goods and people within the economic space of Nigeria and the southern Cameroons.
The negotiations of the treaty of economic and monetary union with Nigeria will have to be done simultaneously with with negotiations for membership of Ecowas so that the coming into effect of the economic and monetary union is concomitant with Ecowas membership.
Subject to the signature and ratification of the Nigercam treaty by the Nigerian and Southern Cameroons legislature, it will become law binding 200 million people living in Nigerian and Southern Cameroons space and the central bank of Nigeria will issue Naira to replace scamfric in the Southern Cameroons.
Advantages of the Naira Option
The main advantage of the Naira Option is that the Southern Cameroons shall become part of a single economic space involving around 200 million consumers.
By simultaneously becoming a member of Ecowas the Southern Cameroons will join.a much larger community stretching from the Mungo river to Dakar which already allows for free movement for its citizens. It is also noteworthy that the Kingdom of.Morocco has also decided to join Ecowas and this will expand the Ecowas economic space to Morocco.
Disadvantages of the Naira Option
1.The main disadvantage of the Naira Option is that the Southern Cameroons shall not have a Central Bank of it’d own because all central banking functions shall be performed by the Central Bank of Nigeria. However, as a sovereign state it shall create a reserve bank which shall be charged with the management of the Southern Cameroons external reserves.
2. Secondly, the Southern Cameroons shall not have an independent monetary policy of its own because interest rates.and the exchange rate between the Naira and other currencies shall be decided by the Central Bank of Nigeria based on Nigeria’s economic fundamentals alone. This is because the Southern Cameroons economy shall be too small compared to that of Nigeria, to constitute a significant factor in economic and monetary policy. This issue can be mitigated by ensuring in the treaty of economic and monetary union that a number of key positions in the Central Bank of Nigeria shall be allocated to the Southern Cameroons. For example the Governor of the Reserve Bank of the Southern Cameroons shall be a member of the governing board of the Central Bank of Nigeria.
3. The Southern Cameroons shall practically become the 37th state in the Federal Republic of Nigeria except that as a sovereign state under the United Nations, it shall have an independent foreign policy. However having surrendered its monetary sovereignty to the Federal Republic of Nigeria, the Southern Cameroons will have to follow the foreign policy options of the Federal Republic of Nigeria around the world.
4. As a “quasi” 37th state in the Federal Republic of Nigeria, the economic position of the Southern Cameroons shall be weak because it cannot benefit from the 3-tier allocation of resources from the Federation Account of the Federal Republic of Nigeria by virtue of the fact that the constitution of the Federal Republic of Nigeria does not apply to the Southern Cameroons. The position of the Southern Cameroons in the Nigercam economic.and monetary union shall be similar to that of Puerto Rico in the United.States.
5. The Nigercam economic and monetary union shall have significant impact on Labour migration in the Southern Cameroons. During the 55 years of cohabitation with LRC, the transport and communication infrastructure of the Southern Cameroons was largely neglected by the Yaounde regime. But in.Nigeria, the constitutional structure made it possible for a massive transfer of resources to take place from the Federal Government to the states and the Local Government Areas. This made it possible for the states.and the Federal Government to make significant investment in infrastructure.
What this means is that the the Southern Cameroons is lagging behind many states in.Nigeria in terms of infrastructure.
Faced with this situation, the impact of the Nigercam economic and monetary union shall be to cause a massive migration of Labour and manpower from the Southern Cameroons to other states of the Nigercam union.
The switch from scamfric to Naira can also reveal and expose a significant disparity in Labour wages between the Southern Cameroons and other states in the Nigercam economic and monetary union and this can induce a massive migration of skilled and professional Labour from the Southern Cameroons to other states of the Nigercam economic and monetary union. This will result in a significant shortage in plantation Labour, as well as blue collar skills that are needed in the Southern Cameroons economy itself.
6. The Southern Cameroons shall also face a significant inflow of migrants from other states from the Nigercam economic and monetary union. Over the years, the massive oil wealth has enabled many private Nigerians to become wealthy and having the capacity to invest in banking, oil.and gas, telecommunications, transport, hotels and other sectors where business opportunities are available.
People in the Southern Cameroons did not have such opportunities under the Yaounde controlled government. Consequently The free trade provisions of the Nigercam.treaty will allow many wealthy Nigerians to come and invest in the Southern Cameroons in many different sectors of the economy. This will also result in a significant migration from other states of the Nigercam union towards the Southern Cameroons and the population of the Southern Cameroons could easily grow to 10 million by 2030.
The process of examining the currency options for an independent Southern Cameroons has shown that the Naira Option has the potential to bring profound transformation to the entire region because it requires the signing of an economic and monetary union treaty between the Southern Cameroons and the Federal Republic of Nigeria to form a common currency union to be called the Nigercam union which will have the Central Bank of Nigeria as the common central bank.
However, if the Nigercam treaty is well conceived, it can attract other countries such as Chad and Equatorial Guinea and possibly.Niger which.are not happy with the role of France in the Franc Zone and who might want to quit the Franc Zone to join the Nigercam union.
The impact of this development on the economies of the Gulf of Guinea will be huge.
Dr. Nfor N Susungi
Group Head Economy
Chairman Briscam Freedom Party