In a Visual Capitalist report of September 17th, 2024, it was noted that the US Dollar dominates the world reserve currencies at 59%. It is followed by the Euro at 20%, the Japanese Yen at 6% and the British Pound at 5%. All other currencies followed with smaller shares, indicating that despite the great fanfare of BRICS Plus, most reserves are still held in the West’s major currencies. The above four currencies control some 90% of world currency reserves. The Chinese Renminbi held only 2% while all the others together held some 8% of the US$ 11.5 trillion of global reserves.
The US Dollar’s share came down from 70% in 2000 but nevertheless remains the main currency of reserves in the world. It is expected to continue in this leading position in the decades to come, although there is a growing usage of non-traditional reserves, such as the Chinese Renminbi. The BRICS Plus countries are the biggest holders of most non-traditional currencies and mostly the Chinese Renminbi, which contributed some 25% of the shift away from the US Dollar.
We will attempt to address in this article the impact of the shifting away from the US Dollar or the impact of the BRICS Plus on the Horn of Africa States region. The region is one of the poorest in the world and when it comes to volumes, nothing much will happen to the issue of reserves. Indeed, the region has no impact on what happens on the world’s reserves at present. Ethiopia has the largest reserves in the region with only a minuscule US$ 3 billion including gold, as of 2020, as reported by the World Bank earlier in this month of November 2024.
However, when it comes to politicking and the challenges of the region, there appears to be reasons to watch. Ethiopia earlier this year embarked on challenging Somalia’s territorial integrity and sovereignty as a nation by signing an illegal MoU with one of the........