No West African Country has met ‘Eco’ currency requirement – ECOWAS Commissioner
None of the 15 ECOWAS member states is yet to meet the primary convergence criteria for the adoption of the single common currency for the sub region.
This is as a result of inadequate funding and other geopolitical factors identified as a setback for the adoption of the common currency.
Speaking at a technical committee meeting on the ‘Eco’ in Nigeria, Commissioner for Macroeconomic Policy and Economic Research for ECOWAS, Dr. Kofi Konadu Apraku, said the criteria which was missed by all ECOWAS member states include annual average inflation rate of less than 10% and gross external reserves of more than 3.0 months of imports cover.
He is however confident that since real GDP growth in ECOWAS improved to 4.2% in 2021, from -0.7 per cent in 2020, the ECOWAS economies can do better and meet the criteria in the future.
Fiscal deficit also came down to 4.6% of GDP, from 5.0% in 2020. However, inflation and current account balance deteriorated.
Only 9 countries have however met all the secondary criteria.
On the inflation criteria, Dr. Konadu Apraku said the picture has remained the same since 2020.
In order to improve on the performance of member states in the medium term, Dr. Konadu Apraku, suggested the implementation of prudent fiscal, monetary and exchange rate policies and the adoption of policy measures, aimed at enhancing revenue mobilisation and diversification of economies.
“There are wide gaps in the laws and regulations between the member states that have a functioning payment systems infrastructure and member states which have only recently developed their systems. All the payment system in our regions have to be integrated, to ensure that the laws and regulations are harmonized,” he charged the members.
The effective implementation of the roadmap for the ECOWAS single currency has been hampered by inadequate funding and limited technical capacity to ensure timely implementation of the core activities.
In this regard, Dr. Konadu Apraku, said there is need for technical assistance in the implementation of roadmap programmes relating to the harmonisation of economic, financial and statistical policies as well as the harmonisation of public finance frameworks.
Apart from the challenging macroeconomic environment, the devastating effects of organised crimes especially terrorism, and the proliferation of small arms are even more daunting to tackle and have a severe negative implications for the stability of the region.
“In other words, the degree of convergence or divergence should not only be assess from the standpoint of the macro-economy. Attention needs to be paid to some of the structural and debilitating social and political issues affecting our Community. Good governance, democratic accountability, fiscal responsibility, building an inclusive society and respect for diversity and individuality are all issues that must also be addressed for the success of our Economic integration project,” he noted.
The observations and recommendations of the committee will be presented at the virtual meeting of the Ministerial Committee on the ECOWAS single currency that is scheduled for June 13, 2022.
The decisions taken by the Ministerial Committee will subsequently be submitted for discussion at the next Summit of the ECOWAS Heads of State and Government.
