The announcement by the Heads of State of ECOWAS on the adoption of a common currency, the ECO, is rather a declaration of intent than action, Director of the Economics Division at the Institute of Statistical, Social and Economic Research (ISSER), Professor Peter Quartey has said.
He has therefore urged the leaders within the sub-region to work at meeting the key criteria.
The West African leaders endorsed the currency at a meeting in Abuja in Nigeria and approved a road map towards the currency’s issuance in January 2020.
There had been an initial roadmap to ensure that all member countries meet three primary criteria for the adoption of the currency.
These included: 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 5 per cent by 2019.
Again, member states were expected to have gross reserves that can finance at least three months of imports.
Though some countries have made progress, the lack of a clear cut success by a single member states across all three criteria, formed the basis of Prof. Peter Quartey’s assertions.
“The Heads of States are basically encouraging members to strengthen their economies to make sure they get the processes right ahead of the 2020 deadline. But I do not think it is a definite situation that we are going into the use of a common currency system,” he argued in an interview with Citifm.
The benefits of the Eco to member countries include; protection from exchange rate costs, improved investments across the sub-region, among others.
The ECOWAS Heads of State however maintain that the January 2020 timeline will not be reversed.
As a result, countries that have made progress will be made to start adopting the currency while others follow.
Professor Quartey cautioned that the Anglophone and Francophone ties may impede the rolling out of the new currency for the sub region.
“Whether France will easily severe its relationship with the Francophone countries is also something that we need to grapple with. In time past, you would also realise that anytime that the Anglophone countries made a move, the Francophone countries will make counter moves. So it is a challenge that countries that intend to go to the use of the Eco will have to deal with,” he concluded.
