The African Development Bank (AfDB) has unveiled a proposal for a new “gold standard” currency arrangement that would be backed by Africa’s critical minerals—such as cobalt, copper, lithium, and manganese. The AfDB notes that although Africa holds about 30% of the world’s reserves of critical minerals, it attracts only a small fraction of global energy and green investments. To address this disparity, the AfDB is proposing a “non-circulating” currency called African Units of Account (AUA). The currency will be pegged to a pool of critical minerals, with each member country contributing a pre-agreed amount of its proven mineral reserve. Each country will then have its local currency converted at an agreed rate based on its contribution. Meanwhile, revenues from local electricity sales will be deposited with a designated settlement agent, which will then sell the equivalent minerals in dollars and pay off the investments that the initiative attracts.
Source: Reuters
