ECOWAS single Currency is said to have been hit by several setbacks as most countries in the West African region are yet to meet the criteria for the monetary union.
The Minister of Finance, Budget and National Planning, Zainab Ahmed during the opening of a technical session of committee of ministers of finance and central bank governors at the ECOWAS Secretariat in Abuja confirmed that only Togo had met all the convergence criteria and added that the January deadline for the launch of the ECOWAS currency will be difficult.
There are three primary and three secondary criteria that a country must achieve to be included in the monetary union.
The primary criteria 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; and gross reserves that could finance at least three months of imports.
The secondary convergence criteria 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.
Ahmed said the single currency would be based on a flexible exchange rate regime, with a monetary policy framework that would be focused on inflation.
The idea for a common currency has been in consideration for nearly three-decade with the objective of achieving a much-desired integration in the West African sub-region and also boosting cross-border trade and economic development.
Eco, is the nomenclature Leaders of the 15 member states of the ECOWAS had agreed to name the common currency.
The ministerial committees are all expected to submit their resolutions to the Authorities of Heads of State and government’s final meeting for 2019 on December 21.
The member countries that made up ECOWAS are Benin, Burkina Faso, Cape Verde, Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo.