Africa, News Watch, Side Feature

Dollar Currency Standard is the Root Cause of Inflation

It has been a week of crises in East Africa, characterised by shortages of fuel and rising prices of consumer goods, as the region continued to shake off Covid-19 blues to revive state economies.

Many areas have recently experienced biting fuel shortages and, where the commodity is available, the price has risen to prohibitive levels.

The cost of living is rising. Inflation is at 6.29 percent in Kenya, 3.2 percent in Uganda, 4.2 percent in Rwanda, 3.8 percent in Tanzania, 13.3 percent in Burundi, 25 percent in South Sudan and five percent in DR Congo. (The EastAfrican, Saturday, 09/04/2022)

The state of misery perpetuated by the shackling of other nations’ currencies to that of the alleged dominant US Dollar currency is mindboggling! Hence, that in itself confirms the fact that sovereignty is a fallacy in this current world setup dominated by America and its financial institutions especially the International Monetary Fund and World Bank.

The ongoing Covid-19 pandemic and the Russia-Ukraine conflict have exacerbated the drowning capitalist economic system to depths beyond recovery whose collapse will be more ruinous compared to that of 2008. The latest growth economic forecasts are anchored on mirage to pacify the resentful but ideologically blind masses.

The soaring inflation is NOT only felt in East African countries, but across the world. The ever-biased Western media has been forced to air the biting living conditions experienced by the citizens in the so-called first and second world nations. All as result of their currencies’ bondage to the dollar. As for the third world nations especially in Africa, they suffer more as a result of their colonial bondage to-date!

For instance, in Kenya, now the Dollar is trading against the Kenyan shilling at $1 = Ksh117! Putting that into context in relation to Kenya’s importation of commodities and foreign debts its catastrophic. In other countries, the situation is worst. All this is a result of a dollar currency standard backed by total nothing except having hope in a stable America! ‘Hope’ is a benchmark for the fiat monetary system!

As Muslims we must not despair because we have an Islamic economic system that emanates from the Creator of the universe, life and man – Allah (swt). However, we must focus our energy and be resilient in this duration of economic hardship compounded by the failed American dominance and its invalid secular capitalist ideology and its systems that include, but not limited to the exploitative economic system anchored on taxation and interest loans.

Now is the moment for Muslims to present their Islam as an alternative ideology that is capable to solve human problems permeating the spheres of life. That will be achievable under the able leadership of an Islamic State, the Khilafah (Caliphate) reestablished on the method of Prophethood. The Khilafah will implement Islam comprehensively and especially its economic system where gold and silver currency will be used as the monetary standard and nothing else! In addition, it will abolish taxation of people since Islam considers it oppression by stealing their hard-earned wealth. As for the usury and all its forms it will not be allowed.

(وَأَحَلَّ ٱللَّهُ ٱلۡبَيۡعَ وَحَرَّمَ ٱلرِّبَوٰاْ)

“But Allah has permitted trade and forbidden interest.” [Al-Baqarah 2: 275].

In addition, it will adopt a self-sufficient policy to avoid foreign reliance.

Joining the call for the resumption of the Islamic way of life via the reestablishment of the Khilafah project is the only solution to the myriads of problems being faced by humanity across the world. Replacing secular democratic politicians, their parties or changing constitutions or joining of the African Union (AU) or United Nations (UN) or their likes will not alleviate our situation, because the root cause is them being subservient to the secular capitalist ideology and its poisonous systems. Crises will continue unabated unless we replace democracy, a ruling system of trial and error with the Khilafah.

Ali Nassoro Ali
Member of the Central Media Office of Hizb ut Tahrir