"Eco: Single inflation rate, 4% fiscal deficit key qualifications for currency usage by ECOWAS members"

" \n An end of year single inflation rate and fiscal deficit of 4 per cent of GDP as been set as key requirements for the qualification of ECOWAS member countries in the usage of the Eco currency. \n \n\n \n This is according to President of the ECOWAS Commission, Jean Claude Kassi Brou. \n \n\n \n Making the disclosure at the 59 Ordinary Session of ECOWAS, President Jean Claude Kassi Brou stated the aforementioned requirements form part of an ten (10) convergence qualification criteria for all ECOWAS members. \n \n\n \n \u201cMember states are urged to work towards meeting the 10 convergence criteria including an end of year single inflation and fiscal deficit of not more than 4 per cent of GDP for qualification,\u201d he stated. \n \n\n \n Speaking further, President Jean Claude Kassi Brou noted the implementation of the single ECO currency has been re-scheduled for 2027, attributing the delay in implementation to the outbreak of the Covid-19 pandemic. \n \n\n \n \u201cWe also have in terms of the single currency a new road map and a new convergence part that covered the period 2022, 2026 and 2027 period being the launching of the Eco. So that\u2019s also being a very big decision because we recall due to the Covid, the head of state decided to suspend the implementation convention of part in 2020 and 2021 and they also decided that the ministerial committee should look at the new road map,\u201d he said. \n \n\n \n He also revealed that only 6 member states out of the 16 have so far ratified the agreement for the use of the Eco single currency. \n \n\n \n The\u00a0Eco\u00a0is the proposed name for the\u00a0common currency\u00a0that the\u00a0West African Monetary Zone\u00a0(WAMZ) plans to introduce in the framework of the\u00a0Economic Community of West African States\u00a0(ECOWAS). This objective is to create a common currency for all\u00a0West Africa\u00a0states. \n \n\n \n It is also to enable the French-speaking west African region to abandon the\u00a0CFA franc\u00a0for the Eco, as part of a process to gain complete fiscal and monetary independence from\u00a0France. \n \n\n \n For the Eco to be implemented, 10 convergence criteria, set out by the\u00a0West African Monetary Institute\u00a0(WAMI), must be met. \n \n\n \n These criteria are divided into four primary and six secondary criteria. \n \n\n \n Up to the fiscal year 2011, only\u00a0Ghana\u00a0had been able to meet all the primary criteria in any single fiscal year. \n \n\n \n The four primary criteria to be achieved by each member country are: \n \n\n \n A single-digit\u00a0inflation\u00a0rate at the end of each year. \n \n\n \n A\u00a0fiscal deficit\u00a0of no more than 4% of the GDP. \n \n\n \n A central bank deficit-financing of no more than 10% of the previous year's tax revenues. \n \n\n \n Gross external reserves that can give import cover for a minimum of three months. \n \n\n \n The six secondary criteria to be achieved by each member country are: \n \n\n \n Prohibition of new domestic default payments and liquidation of existing ones. \n \n\n \n Tax revenue should be equal to or greater than 20 percent of the GDP. \n \n\n \n Wage bill to tax revenue equal to or less than 35 percent. \n \n\n \n Public investment to tax revenue equal to or greater than 20 percent. \n \n\n \n A stable real exchange rate. \n \n\n \n A positive real interest rate. \n "

"Eco: Single inflation rate, 4% fiscal deficit key qualifications for currency usage by ECOWAS members"

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