Thread by @ingridharvold

Uche explains the origins of the Sterling Guarantee Agreement: started w/ colonial rule for Sterling area countries & remained reserve currency of choice for SAC. This led to enhanced British trade w/ SAC (preferential tariffs & other advantages). #AfricanMonetarySovereignty

Uche continues: As the empire started diminishing, so did the Sterling. As we know, Bretton Woods Agreement hinged on gold and USD. Sterling devaluations in 1931 & 1949; by 1955 USD was leading reserve currency. #AfricanMonetarySovereignty #MES_Africa2019

The Sterling Guarantee Agreement ended officially in Nigeria in Sept 1973. #AfricanMonetarySovereignty #MES_Africa2019

In 1974 the Central Bank of Nigeria started to progressively appreciate the Naira. Uche argues that the movements of the Naira depended solely on behavior of the US dollar on the Forex markets. Reserves rose because of oil rents. #AfricanMonetarySovereignty #MES_Africa2019

There was curious (arbitrage) practice, Uche continues. All forex bought or sold via either dollars or sterling. The rates for $ and £ were fixed against the Naira at infrequent intervals.#AfricanMonetarySovereignty #MES_Africa2019

...For some time now, the CB's rate for £ against Naira has been artificially high. As a consequence, banks now advice customers to have import invoices drawn in dollars and to make all sterling remittances via dollars. #AfricanMonetarySovereignty #MES_Africa2019

Uche concludes that poor reserve management and negotiation skills were responsible for Nigeria's dissatisfaction with SGA and that Nigeria has been consistently unable to manage its reserves during and after SGA. #AfricanMonetarySovereignty #MES_Africa2019

Quite a few questions from the audience now about the underlying political economy economy factors and material interests that might have played a role in this story. #AfricanMonetarySovereignty #MES_Africa2019

Watch livestream here 👇
#AfricanMonetarySovereignty #MES_Africa2019

https://twitter.com/Mon_Sovereignty/status/1192853529754517508?s=19

Last but not least, we have @DanielaGabor on #WallStreetConsensus!

Today someone defined monetary sovereignty as being able to borrow in your own currency. Gabor warns that this may not hold as much "sovereignty" as you might think.
#AfricanMonetarySovereignty #MES_Africa2019

The trillion of institutional investors are meant to close the development finance gap, according to World Bank & IMF.
#AfricanMonetarySovereignty #MES_Africa2019

So sustainability is turned into a profitable business that attracts institutional investors.

@DanielaGabor calls this a movement "from accumulation by disposession to accumulation by derisking".

#AfricanMonetarySovereignty
#MES_Africa2019

Gabor compares the Washington Consensus to the Wall Street Consensus, policy by policy 👇

#AfricanMonetarySovereignty #MES_Africa2019 #wallstreetconsensus

Here's a map of how the Maximizing Finance Agenda (or #wallstreetconsensus) usually works, taking Port Enfidha here in Tunisia as an example. Main aim: channel trillions of global Institutional investors into local SDG assets.
#AfricanMonetarySovereignty
#MES_Africa2019

Gabor gives some examples of how the theoretical risks she has outlined have materialized in other African countries, leaving the state on the hook. One example is the demand risk associated with Nigeria's Azura power plant (a PPP). #AfricanMonetarySovereignty #MES_Africa2019

In the end, the demand risk was covered by the central bank. (Most PPPs these days have ISDS written into the contract, so company can take a states to court if they don't comply).
#AfricanMonetarySovereignty #MES_Africa2019

#wallstreetconsensus extends to climate policies as well, through what Gabor calls private greenwashing and socialised costs. #AfricanMonetarySovereignty #MES_Africa2019

Gabor unpacks through several slides how greenwashing happens through the use of the Environmental, Social and Governance (ESG) taxonomy. #AfricanMonetarySovereignty
#MES_Africa2019

Gabor has written a whole report on this: "Securitization for Sustainability". #AfricanMonetarySovereignty #MES_Africa2019
us.boell.org/2019/10/11/sec…

#wallstreetconsensus leads to a structural transformation of financial systems towards increased vulnerability. Which brings us back to why the development of local currency bond markets will likely not deal with increased sovereignty. #AfricanMonetarySovereignty #MES_Africa2019

Gabor ends on a positive note and argues that climate change is an "opportunity" for the left. She argues for a green developmental state to renationalise and tame finance by greening it. #AfricanMonetarySovereignty #MES_Africa2019