We need a single currency

West African countries have for sometime now struggled to introduce a single currency for members in the sub-region.

The dream to introduce the “ECO” by the West Africa Monetary Institute (WAMI) for the non-francophone caucus of the Economic Community of West African States (ECOWAS) sub-region faced challenges of fiscal consolidation and convergence criteria.
WAMI has therefore let go of this dream after several failed attempts and is now joining the ECOWAS to introduce a new currency for all the 16 countries in the sub-region.

The economic importance of a single currency cannot be overemphasised, and it is needless to talk about how it would integrate the economies of West African countries. 

For us at the GRAPHIC BUSINESS, we believe the success story of the Euro should be inspiring enough to help countries overcome the challenges of the convergence criteria. It is rather unfortunate that we have on more than two occasions allowed the opportunity to slip by.

Better late than never though, so it is refreshing that a Chief Economist at WAMI Dr Christian Ahortor has said, his outfit would continue to strengthen its partnership with ECOWAS, strategic development institutions and agencies, with the view to delivering on the ECOWAS Single Currency Roadmap by the year 2020.

We are gladdened at the fact that there is a renewed effort to achieve a single currency, not just for the English-speaking African counties, but the entire ECOWAS bloc.

However, the issue of convergence criteria still rages. Regarding the new roadmap, the countries must meet four primary criteria, which are: a single-digit inflation, a fiscal deficit (excluding grants) of not more-than 4.0 per cent of GDP and 3.0 per cent including grants; central bank financing of fiscal deficit of not more-than 10 per cent of previous year’s tax revenue; and a gross external reserves of not less-than 3.0 months of import cover.

It is the view of the GRAPHIC BUSINESS that leaders of these countries would expedite efforts to meet these criteria to avoid the challenge it faced with the earlier dream.

That is the only way they can regain our confidence, otherwise we will always regard them as a ‘talk shop.’ The success story of the Euro zone must inspire us. — GB