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The President of the Economic Community of West African States (ECOWAS) Commission, Jean-Claude Kassi Brou has disclosed that the ECOWAS Task Force on the region’s proposed single currency would meet in June to give the assessment on the studies of the currency.
Brou made this known while presenting the Community Work Programme at the ongoing First Ordinary Session of the ECOWAS Parliament in Abuja on Friday, stressing that critical stakeholders in the region’s economic and finance sectors, including the central banks and ministers of finance, had been brainstorming on the modalities for the single currency.
“The single currency is a topic that is very important because it completes the free movement of persons for a single market and if there is a single currency, one can carry out trade and there is a need for harmonisation.
“Deliberations are being carried out with the central banks and the ministers of finance in the region and some key issues are being discussed.
“Issues such as the convergence criteria, the best exchange regime to adopt with challenges and costs are involved so as to give the best conditions for the community.
“The studies that are being carried out would be completed by next month so that we can have the proposals and make progress,” he added.
The Ivorian President of the ECOWAS Commission said further that next month’s meeting will determine the possibility of achieving the single currency by 2020 set by the Authority of Heads of State of the ECOWAS countries.
“It will be on the basis of the results of all the studies on the assessment that is currently being done that we will see where we stand exactly but the objectives have been set by the Heads of State,” he said.
The issue of the single currency for the sub-region has dominated discourse in major sessions of ECOWAS, which prompted the Authority of Heads of State and Government to set aside 2020 for West African countries to achieve the single currency which, they said would promote economic integration.
However, there are varying degrees of readiness by member countries of the 15- member regional bloc as many are yet to meet the fundamental criteria set. It was suggested at a point that the nations that meet the criteria should commence the single currency, but many of the member countries are yet to meet the criteria, which appears to have raised serious concerns over the possibility of the take off of the project ahead of the 2020 deadline.
It would be recalled that Kasi Brou had said in his 2018 Community Report to the Legislature that many member states were yet to meet the macroeconomic convergence criteria required for a monetary union.
The three primary criteria that are used are a budget deficit of not more than three per cent; average annual inflation of less than 10 per cent with a long term goal of not more than five per cent by 2019; and gross reserves that can finance at least three months of imports.
The three secondary convergence criteria that have been adopted by ECOWAS are public debt/Gross Domestic Product of not more than 70 per cent; central bank financing of the budget deficit should not be more than 10 per cent of previous year’s tax revenue; and nominal exchange rate variation of plus or minus 10 per cent.