• Login
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
  • Home
  • News
    • General
    • Political
  • Economy
  • Business
    • Agribusiness
    • Aviation
    • Banking & Finance
    • Energy
    • Insurance
    • Manufacturing
    • Markets
    • Maritime
    • Real Estate
    • Tourism
    • Transport
  • Technology
    • Telecom
    • Cyber-security
    • Cryptocurrency
    • Tech-guide
    • Social Media
  • Features
    • Interviews
    • Opinions
  • Reports
    • Banking/Finance
    • Insurance
    • Budgets
    • GDP
    • Inflation
    • Central Bank
    • Sec/Gse
  • Lifestyle
    • Sports
    • Entertainment
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video
No Result
View All Result
No Result
View All Result
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
Home Economy

ECOWAS should shift focus to reforms that stimulate regional trade and growth

4 years ago
in Economy, Features, highlights, Home, home-news, latest News, Opinions, Trade
3 min read
0 0
0
97
VIEWS
Share on FacebookShare on TwitterShare on Linkedin

ECOWAS should shift focus to reforms that stimulate regional trade and growth.

Last month, the Economic Community of West African States (ECOWAS) announced that it would postpone the launch of its single currency, the ‘eco’, to 2027, due to challenges posed by the COVID-19 pandemic. While the move does not come as a surprise given the inherent complications with such an endeavour, the pandemic has made it increasingly difficult for member states to meet various convergence criteria.

While the eco is placed on ice, ECOWAS should shift its focus to reforms that boost trade and drive economic growth in a region home to more than 380 million people. Reforms are essential for the adoption of a single currency to become viable. 

Of the 15 member states that have agreed to adopt the eco, eight currently use the CFA franc, which is pegged to the euro. The other seven countries have their own currencies that are not freely convertible or transferable. These currencies remain susceptible to bouts of volatility and sporadic liquidity. 

The adoption of the eco would allow these markets to transition toward a more fully convertible and transferable currency. Additionally, a single currency will increase trade between members, lower transaction costs, and improve payment platforms and mechanisms between member states.

Read: IMF applauds BoG’s monetary policy stance

The role of monetary policy in the eco 

RelatedPosts

Parliament Adjourns Sine Die After Intense Legislative Session Marked by Reform Calls and Tributes

GACL Terminates Evatex Revenue Assurance Contract Amid OSP Probe

Cyber Security Authority Flags Rising Mobile Data Scam, Cautions Public

For this arrangement to function, central bank independence is going to be pivotal. This of course presents these countries with an opportunity to strengthen institutions and further improve the policy environment. 

However, member states will have to give up monetary sovereignty through the adoption of a common currency. This includes the right to issue currency, determine or change the value of the currency, and regulate the use of the currency. As it stands, some member states use these rights as the basis of their monetary policy interventions, making it difficult for them to converge to new standards.  

The majority of member states have not been able to achieve long periods with a stable currency and low inflation, indicating that policy transmission is compromised.

For the eco to succeed, it has to be a collaborative effort bringing about the necessary reforms and aggressively alleviating structural deficiencies. It will be imperative that monetary policy is strictly aligned to decision-making to achieve optimal output outcomes. All central banks will need to read from the same script, as a single currency and monetary policy frameworks must be aligned. 

Addressing structural issues and the AfCFTA

In the interim, ECOWAS should shift its focus to addressing the structural deficiencies that weigh down productivity in their member states. These include land border closures, non-tariff barriers, unreliable power supply, inadequate transport nodes, and political instability, such as that recently seen in Mali and its subsequent suspension from the bloc.

Several of the bloc’s member states are under enormous economic pressure which has been amplified by the pandemic and thus struggling to pay their national debt. The focus must also be placed on restoring public debt on a more sustainable path in the region before it can adopt a single currency. Creating an inclusive growth environment and restoring debt sustainability are prerequisites.

Also: Databank pegs Ghana’s 2021 growth rate between 3.9% and 4.9%

The Africa Continental Free Trade Area (AfCFTA) offers huge potential for growth in the region and across the continent. As AfCFTA gains traction it should improve trade and competitiveness, giving Africa more relevance in global trade negotiations. 

ECOWAS can use AfCFTA as a springboard to economic integration and as a strategy to enhance growth in the region. For AfCFTA to succeed, the focus must be placed on developing and upgrading productive infrastructure and transport routes across the bloc to allow for the efficient movement of goods to market. 

Demonstrating their ability to successfully implement AfCFTA and reap the economic benefits it offers will be key to assessing the viability of the eco. Should ECOWAS member states showcase commonality through the successful implementation of AfCFTA over the next six years, there would be a reason to believe the eco could succeed too.

Ultimately, a single currency and continued regional integration will support growth over time in the region, however, economic and structural reforms will remain a pivotal prerequisite. Furthermore, the successful implementation of AfCFTA across ECOWAS must be prioritized to boost regional trade and showcase cohesion, allowing the idea of a single currency to grow traction and support when the time comes.

Source: Jibran Qureishi, Head of Africa Research at Standard Bank Group
Via: norvanreports
Tags: AFCFTAAfrican Continental Free Trade Area (AfCFTA)bouts of volatility and sporadic liquidityBusiness Forum on the Start of AfCFTA Trading in GhanaCOVID-19 pandemicEconomic Community of West African States (ECOWAS)ECOWASECOWAS should shift focus to reforms that stimulate regional trade and growththe ecoWorld Trade Organization (WTO)
No Result
View All Result

Highlights

Gov’t Reopens Talks With PayPal to Restore Full Service Access in Ghana

Financial Sector Assets up 34.6% in 2024 to GHS 525.59 Billion

Banking Sector Soundness Remains Robust in 2024 Amid Strong Profitability, Adequate Capital Buffers

Sha’Carri Richardson Withdraws from US Trials Following Arrest

From Singuluma to El Kaabi: Can CHAN 2024 Unleash the Next Hat-trick Hero?

Ghana to Welcome King’s Baton Relay on August 8 Ahead of 2026 Commonwealth Games

Trending

Features

Parliament Adjourns Sine Die After Intense Legislative Session Marked by Reform Calls and Tributes

August 2, 2025

Parliament Adjourns Sine Die After Intense Legislative Session Marked by Reform Calls and Tributes Parliament has adjourned...

GACL Terminates Evatex Revenue Assurance Contract Amid OSP Probe

August 2, 2025

Cyber Security Authority Flags Rising Mobile Data Scam, Cautions Public

August 2, 2025

Gov’t Reopens Talks With PayPal to Restore Full Service Access in Ghana

August 2, 2025
Bank of Ghana

Financial Sector Assets up 34.6% in 2024 to GHS 525.59 Billion

August 2, 2025

Who we are?

NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World

NorvanReports is a unique data, business, and financial portal aimed at providing accurate, impartial reporting of business news on Ghana, Africa, and around the world from a truly independent reporting and analysis point of view.

© 2020 Norvanreports – credible news platform.
L: Hse #4 3rd Okle Link, Baatsonaa – Accra-Ghana T:+233-(0)26 451 1013 E: news@norvanreports.com info@norvanreports.com
All rights reserved we display professionalism at all stages of publications

No Result
View All Result
  • Home
  • Business
    • Agribusiness
    • Aviation
    • Energy
    • Insurance
    • Manufacturing
    • Real Estate
    • Maritime
    • Tourism
    • Transport
    • Banking & Finance
    • Trade
    • Markets
  • Economy
  • Reports
  • Technology
    • Cryptocurrency
    • Cyber-security
    • Social Media
    • Tech-guide
    • Telecom
  • Features
    • Interviews
    • Opinions
  • Lifestyle
    • Entertainment
    • Sports
    • Travel
    • Environment
    • Weather
  • NRTV
    • Audio
    • Video

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
NORVANREPORTS.COM | Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.